<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from ____________________to_________________
Commission file No. 0-13849
RAMSAY HEALTH CARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-0857352
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE POYDRAS PLAZA
639 LOYOLA AVENUE, SUITE 1700
NEW ORLEANS, LOUISIANA 70113
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (504) 525-2505
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
The number of shares of the Registrant's Common Stock outstanding at
November 15, 1995 follows:
Common Stock, par value $0.01 per share - 8,012,701 shares
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets - September 30, 1995 and
June 30, 1995 (unaudited)............................................... 1
Consolidated statements of operations - quarter ended September 30, 1995
and 1994 (unaudited).................................................... 3
Consolidated statements of cash flows - quarter ended September 30, 1995
and 1994 (unaudited).................................................... 4
Notes to consolidated financial statements - September 30, 1995
(unaudited)............................................................. 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................. 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Current Reports on Form 8-K ......................... 13
SIGNATURES................................................................ 15
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30 JUNE 30
1995 1995
------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.................................. $ 6,045,000 $ 9,044,000
Patient accounts receivable, less allowances for doubtful
accounts of $3,469,000 and $3,886,000 at
September 30, 1995 and June 30, 1995, respectively........ 23,705,000 21,564,000
Amounts due from third-party contractual agencies.......... 5,303,000 5,956,000
Other receivables.......................................... 3,444,000 3,655,000
Other current assets....................................... 2,370,000 2,764,000
------------ ------------
TOTAL CURRENT ASSETS...................................... 40,867,000 42,983,000
OTHER ASSETS
Cash held in trust......................................... 1,648,000 1,778,000
Cost in excess of net asset value of purchased businesses.. 638,000 663,000
Unamortized preopening and loan costs...................... 1,895,000 2,221,000
Receivable from affiliated company......................... 7,250,000 7,170,000
Deferred income taxes...................................... 8,932,000 8,652,000
Other non-current assets................................... 2,218,000 2,301,000
------------ ------------
22,581,000 22,785,000
PROPERTY AND EQUIPMENT
Land....................................................... 5,359,000 5,383,000
Building and improvements.................................. 77,764,000 77,630,000
Equipment, furniture and fixtures.......................... 19,846,000 19,611,000
------------ ------------
102,969,000 102,624,000
Less accumulated depreciation.............................. 30,288,000 29,156,000
------------ ------------
72,681,000 73,468,000
------------ ------------
$136,129,000 $139,236,000
============ ============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30 JUNE 30
1995 1995
------------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable................................................ $ 3,072,000 $ 3,868,000
Accrued salaries and wages...................................... 4,077,000 4,843,000
Other accrued liabilities....................................... 1,191,000 1,347,000
Amounts due to third-party contractual agencies................. 5,592,000 4,996,000
Current portion of long-term debt............................... 6,333,000 3,831,000
------------ ------------
TOTAL CURRENT LIABILITIES...................................... 20,265,000 18,885,000
LIABILITIES FOR SELF-INSURANCE CLAIMS, less
current portion................................................. 1,224,000 1,337,000
LONG-TERM DEBT, less current portion............................. 52,178,000 55,568,000
MINORITY INTERESTS............................................... 1,075,000 1,667,000
STOCKHOLDERS' EQUITY
Class B convertible preferred stock, Series C, $1 par value
--authorized 152,321 shares; issued 142,486 shares
(liquidation value of $7,244,000) including accrued dividends
of $91,000..................................................... 233,000 233,000
Common Stock, $.01 par value--authorized 20,000,000
shares; issued 8,316,878 shares at September 30, 1995 and
8,290,795 shares at June 30, 1995.............................. 83,000 83,000
Additional paid-in capital...................................... 99,146,000 99,147,000
Retained earnings (deficit)..................................... (34,176,000) (33,785,000)
Treasury Stock, at cost--581,550 shares at September 30, 1995
and June 30, 1995.............................................. (3,899,000) (3,899,000)
------------ ------------
61,387,000 61,779,000
------------ ------------
$136,129,000 $139,236,000
============ ============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30
---------------------------
1995 1994
-------------- -----------
<S> <C> <C>
NET REVENUES $29,129,000 $35,823,000
Operating Expenses:
Salaries, wages and benefits................................. 16,239,000 17,734,000
Other operating expenses..................................... 9,556,000 11,011,000
Provision for doubtful accounts.............................. 956,000 1,285,000
Depreciation and amortization................................ 1,335,000 1,840,000
Interest and other financing charges......................... 1,726,000 2,167,000
----------- -----------
TOTAL OPERATING EXPENSES................................ 29,812,000 34,037,000
----------- -----------
INCOME (LOSS) BEFORE MINORITY INTERESTS
AND INCOME TAXES............................................. (683,000) 1,786,000
Minority interests.............................................. (52,000) 847,000
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES............................... (631,000) 939,000
Provision for income taxes...................................... (240,000) 351,000
----------- -----------
NET INCOME (LOSS)......................................... $ (391,000) $ 588,000
=========== ===========
Income (loss) per common and dilutive common equivalent share:
Primary...................................................... $(0.06) $0.06
Fully diluted................................................ $(0.06) $0.06
Weighted average number of shares outstanding:
Primary...................................................... 7,721,000 9,481,000
Fully diluted................................................ 7,735,000 9,547,000
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30
---------------------------
1995 1994
-------------- ------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income (loss)............................................... $ (391,000) $ 588,000
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization.................................. 1,526,000 2,034,000
Benefit for deferred income taxes.............................. (280,000) (53,000)
Provision for doubtful accounts................................ 956,000 1,285,000
Minority interests............................................. (52,000) 847,000
Cash flows from (increase) decrease in operating assets:
Accounts receivable........................................... (3,097,000) (513,000)
Amounts due from third-party contractual agencies............. 653,000 (4,217,000)
Other current assets.......................................... 605,000 (514,000)
Other non-current assets...................................... 3,000 (12,000)
Cash flows from increase (decrease) in operating liabilities:
Accounts payable.............................................. (796,000) 666,000
Accrued salaries, wages and other liabilities................. (922,000) (1,604,000)
Unpaid self-insurance claims.................................. (113,000) 135,000
Amounts due to third-party contractual agencies............... 596,000 1,293,000
----------- -----------
Total adjustments............................................ (921,000) (653,000)
----------- -----------
Net cash used in operating activities....................... (1,312,000) (65,000)
----------- -----------
Cash Flows from Investing Activities
Expenditures for property and equipment........................ (345,000) (787,000)
Preopening costs............................................... (22,000) (296,000)
----------- -----------
Net cash used in investing activities....................... (367,000) (1,083,000)
----------- -----------
Cash Flows from Financing Activities
Loan costs..................................................... (21,000) (145,000)
Proceeds from exercise of stock options and employee
stock purchase plan........................................ 90,000 68,000
Distributions to minority interests............................ (540,000) (1,116,000)
Payments on debt............................................... (888,000) (3,608,000)
Payment of preferred stock dividends........................... (91,000) (91,000)
Purchase of treasury stock..................................... --- (44,000)
Restricted cash used for debt payments......................... --- 3,055,000
Cash held in trust............................................. 130,000 19,000
----------- -----------
Net cash used in financing activities....................... (1,320,000) (1,862,000)
----------- -----------
Net decrease in cash and cash equivalents....................... (2,999,000) (3,010,000)
Cash and cash equivalents at beginning of period................ 9,044,000 6,207,000
----------- -----------
Cash and cash equivalents at end of period...................... $ 6,045,000 $ 3,197,000
=========== ===========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest....................................................... $ 1,344,000 $ 1,747,000
Income taxes................................................... 0 616,000
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1995
NOTE 1
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation of the interim information are, unless
otherwise discussed in this report, of a normal recurring nature and have been
included. The Company's business is seasonal in nature and subject to general
economic conditions and other factors. Accordingly, operating results for the
quarter ended September 30, 1995 are not necessarily indicative of the results
that may be expected for the year. For further information, refer to the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended June 30, 1995.
NOTE 2
At September 30, 1995, the Company's credit facilities included
$34,168,750 in senior secured notes and $2,076,924 in subordinated secured notes
(the 1990 Credit Facility), and approximately $21,000,000 in letters of credit
(to support the Company's variable rate demand revenue bonds) and $2,000,000 in
a working capital facility (the 1993 Credit Facility).
On May 1, 1995, the Company utilized a portion of the proceeds from a
sale/leaseback of two of its inpatient facilities and prepaid $7.5 million of
principal due on the senior secured notes as follows: $3,531,250 in full
satisfaction of the amount due on September 30, 1995, $3,531,250 in full
satisfaction of the amount due on March 31, 1996, and $437,500 in partial
satisfaction of the $3,531,250 due on September 30, 1996. The senior secured
notes bear interest at 11.6% and are due in semi-annual installments that began
on March 31, 1993 and, after the May 1, 1995 prepayment, resume semi-annual
installments on September 30, 1996 through March 31, 2000. The subordinated
secured notes bear interest at 15.6% and are due in semi-annual installments
that began on March 31, 1994 and end on March 31, 2000.
The variable rate demand revenue bonds were issued in 1984 and 1985,
have terms of 30 years and require annual principal payments of $800,000
(through year 2000) and $900,000 to $1,300,000 from years 2001 to maturity.
Amounts outstanding under the working capital facility, which totalled $1
million and $1.5 million at September 30, 1995 and June 30, 1995, respectively,
bear interest at a variable rate, which, at September 30, 1995, was 8.3%.
Effective September 15, 1995, the Company and the group of banks supporting the
1993 Credit Facility agreed to an extension of the facility to February 15,
1997. In connection with this extension, certain financial covenants were
modified and the Company agreed to reduce the banks' exposure by $2.8 million on
or before December 31, 1995 and an additional $3.0 million on or before July 1,
1996.
5
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
A summary of the Company's debt obligations is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 JUNE 30
1995 1995
------------ -----------
<S> <C> <C>
11.6% senior secured notes.......... $34,169,000 $34,169,000
Variable rate demand revenue bonds.. 20,100,000 20,200,000
15.6% subordinated secured notes.... 2,077,000 2,308,000
Capital lease obligation............ 814,000 919,000
Working capital facility............ 1,000,000 1,500,000
Other notes payable................. 351,000 303,000
----------- -----------
58,511,000 59,399,000
Less amounts due within one year.... 6,333,000 3,831,000
----------- -----------
$52,178,000 $55,568,000
=========== ===========
</TABLE>
The Company has pledged as collateral substantially all of its land,
buildings and improvements.
NOTE 3
In April 1995, the Company sold and leased back the land, buildings
and fixed equipment of two of its inpatient facilities. The leases have a
primary term of 15 years (with three successive renewal options of 5 years each)
and require aggregate annual minimum rentals of $1.54 million, payable monthly.
Beginning April 1, 1996, the lease payments are subject to any upward adjustment
(not to exceed 3% annually) in the consumer price index over the preceding
twelve months. Effective April 1995, the Company agreed to lease an 80-bed
facility near Salt Lake City, Utah for four years, with an option to renew for
an additional three years. The lease requires annual base rental payments of
$456,000. In addition, the lease provides for percentage rent payments to the
lessor equal to 2% of the net revenues of the facility, payable quarterly. The
Company leases its Corporate headquarters for a term of five years ending in
April 1999 and various other clinics and outpatient operations over terms
ranging from one to five years. Annual rent expense related to noncancellable
operating leases totals approximately 2.7 million.
NOTE 4
The provision for income taxes included in the consolidated statements
of income differs from the amounts computed by applying the normal statutory
rates to income before income taxes because such provision includes a) amounts
reportable as income for federal income tax purposes which are not income for
financial reporting purposes, b) amounts deducted for financial reporting
purposes that are not allowable deductions for federal and state income tax
purposes and c) amounts for state income taxes applicable to profitable
subsidiaries which do not utilize the operating losses generated by unprofitable
subsidiaries to offset taxable income. At September 30, 1995, the Company has
estimated operating loss carryforwards available to reduce future taxable income
of approximately
6
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
$21 million, subject to significant annual limitations pursuant to Section 382
of the Internal Revenue Code of 1986, as amended.
NOTE 5
Effective April 24, 1995, the Company distributed, on a pro-rata basis
in the form of a dividend, the common stock of its subsidiary, Ramsay Managed
Care, Inc. ("RMCI"), held by the Company, to the holders of record on April 21,
1995 of the Company's common and preferred stock (the "RMCI Distribution").
RMCI, which was formed in October 1993, manages the delivery of mental health
and substance abuse care and provides employee assistance and mental health and
substance abuse treatment programs for and on behalf of self insured employers,
health maintenance organizations ("HMOs"), insurance companies, government
agencies and other third-party payors. Subsequent to the RMCI Distribution, RMCI
ceased being a subsidiary of the Company.
For the three months ended September 30, 1994, net revenues, operating
expenses and income before income taxes of RMCI were $3,463,000, $3,400,000 and
$63,000, respectively. Inclusion of RMCI in the Company's consolidated results
of operations for the quarter ended September 30, 1994 had no effect on the
earnings per share reported in that quarter.
At September 30, 1995, total net cash advances made by the Company to
or on behalf of RMCI, including for purposes of partially funding acquisitions
and for working capital and other corporate purposes, totalled approximately
$7.6 million. Of this amount, $6 million is represented by an unsecured,
interest-bearing (8%), subordinated promissory note due from RMCI and issued on
October 25, 1994. Interest on the subordinated promissory note, which is
payable quarterly, commenced June 30, 1995 and principal is payable over a four-
year period in equal quarterly installments commencing September 30, 1996.
In addition to the subordinated promissory note and pursuant to a
Distribution Agreement between RHCI and RMCI which governed the RMCI
Distribution, RMCI agreed to pay amounts owed to RHCI as of April 24, 1995 (the
"Distribution Date") totalling approximately $1,100,000. Pursuant to the
Distribution Agreement, $600,000 of this amount was payable by RMCI on or before
October 21, 1995 or on such other date and on such other terms and conditions as
mutually agreed to by RHCI and RMCI. RMCI paid $275,000 to RHCI on June 30,
1995 in partial satisfaction of the amount due on October 21, 1995 and the
parties are currently discussing deferred payment terms on the remaining
$325,000. The balance of the amount outstanding on the Distribution Date,
approximately $500,000, is payable on or before December 31, 1996, together with
interest at 7% per annum accruing from October 21, 1995, or on such other date
and on such other terms and conditions as shall be mutually agreed to between
RHCI and RMCI.
Subsequent to the RMCI Distribution, RHCI paid additional amounts
incurred by RMCI prior to the Distribution Date and provided certain
administrative services to RMCI pursuant to certain agreements entered into in
connection with the RMCI Distribution. RHCI will be paid for these amounts,
which at September 30, 1995 totalled approximately $725,000, on terms currently
being discussed between the parties.
7
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company pursues business expansion opportunities which are
consistent with its overall strategic plan and disposes of operations no longer
considered viable or consistent with this plan. The following significant
events, which occurred subsequent to September 30, 1994, impact the comparison
of revenues and operating expenses of the Company between the periods presented.
* The RMCI Distribution.
* Virtual elimination (due to statutory changes effective July 1, 1995)
of disproportionate share payments to the Company. Disproportionate share
was a funding mechanism designed to adequately reimburse facilities serving
a disproportionately high volume of Medicaid patients, relative to other
providers. The majority of disproportionate share payments were received
at the Company's Three Rivers facility, which was operated as a limited
partnership in which the Company had a 55% interest and limited partners
maintained a 45% interest. Due to the virtual elimination of
disproportionate share payments effective July 1, 1995, as well as
significantly more restrictive admission criteria imposed by the State of
Louisiana on behavioral health providers treating adolescents in the State,
the Three Rivers facility was closed in June 1995.
* Commencement of operations in April 1995 at an 80-bed leased facility
near Salt Lake City, Utah.
* The closure of several day treatment centers and outpatient clinics
during fiscal 1995 due to negative operating margins.
* Expansion of the Company's contract services division during fiscal
1995.
8
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
The following table sets forth, for the period indicated, certain items of
the Company's Consolidated Statements of Operations as a percentage of the
Company's net revenues. The prior year percentages have been adjusted to
exclude the operations of RMCI.
<TABLE>
<CAPTION>
PERCENTAGE OF NET REVENUES
QUARTER ENDED
SEPTEMBER 30
--------------------------
1995 1994
------- -------
<S> <C> <C>
Net revenues.......................... 100.0% 100.0%
Operating expenses:
Salaries, wages and benefits......... 55.7 50.4
Other operating expenses............. 32.8 28.9
Provision for doubtful accounts...... 3.3 3.9
Depreciation and amortization........ 4.6 5.0
Interest expense..................... 5.9 6.5
------ -----
Total operating expenses.............. 102.3 94.7
------ -----
Income before minority interests and
income taxes......................... (2.3) 5.3
Minority interests.................... (0.1) 2.6
------ ----
Income before income taxes............ (2.2) 2.7
====== ====
</TABLE>
Net revenues in the quarter ended September 30, 1995 were $29.1
million, compared to $35.8 million in the comparable quarter of the prior fiscal
year. The material changes in net revenues between these periods consisted of
(a) a $1.3 million decrease in same facility net inpatient revenues between
periods, (b) a $0.2 million decrease in same facility net outpatient revenues
between periods, (c) a decrease in net patient revenues of $4.4 million (of
which $2.2 million was disproportionate share revenues) due to the closure of
the Three Rivers facility, (d) an increase in net patient revenues of $1.2
million related to the opening of an additional facility near Salt Lake City,
Utah ("Benchmark South"), (e) a $1.2 million increase in net patient revenues
related to the Company's subacute operations, (f) a $0.3 million increase in net
revenues related to the Company's contract services division, and (g) net
revenues in the quarter ended September 30, 1994 related to RMCI of $3.5
million.
Same facility net inpatient revenues decreased 6% between periods
(from $22.3 million in the September 1994 quarter to $21.0 million in the
current year quarter) which was consistent with the 5% decrease in same facility
patient days between periods. The increase in net revenues related to subacute
operations is due to the opening of an additional unit after the September 1994
quarter and a significant increase in census between periods at one of the
Company's other three subacute units.
Salaries, wages and benefits in the quarter ended September 30, 1995
were $16.2 million, compared to $17.7 million in the comparable quarter of the
prior fiscal year. Same facility salaries, wages and benefits increased $0.5
(from $13.1 million to $13.6 million) between periods, or 4%.
9
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
Other changes to salaries, wages and benefits between periods included (a) a
decrease of $1.6 million related to the closure of the Three Rivers facility,
(b) an increase of $0.7 million related to the opening of Benchmark South, (c)
an increase of $0.2 million related to subacute operations, (d) an increase of
$0.2 million related to the contract services division and (e) salaries, wages
and benefits in the quarter ended September 30, 1994 related to RMCI of $1.4
million.
Other operating expenses in the quarter ended September 30, 1995 were
$9.6 million, compared to $11.0 million in the comparable quarter of the prior
fiscal year. Same facility other operating expenses increased $0.3 million
between periods ($7.4 million in the current quarter compared to $7.1 million in
the prior fiscal year quarter) whereas other operating expenses of RMCI in the
quarter ended September 30, 1994 were $1.6 million. The decrease in other
operating expenses between periods due to the closure of the Three Rivers
facility was offset by the increase in other operating expenses due to the
opening of Benchmark South.
The provision for doubtful accounts in the quarter ended September 30,
1995 totalled $1.0 million, compared to $1.3 million in the prior year
comparable quarter. The overall provision for doubtful accounts associated with
the same facilities decreased $0.3 million between periods due to the continued
shift in the Company's overall payor mix away from charged-based payors, which
typically include a higher patient portion due and, consequently, higher bad
debts.
Depreciation and amortization in the quarter ended September 30, 1995
totalled $1.3 million, compared to $1.8 million in the prior year comparable
quarter. This decrease is due to (a) the closure of the Three Rivers facility
($0.1 million), (b) depreciation and amortization in the quarter ended September
30, 1994 related to RMCI of $0.2 million and (c) an asset write-down recorded by
the Company in the fourth quarter of its prior fiscal year, which reduced
depreciation expense on the underlying assets between periods by $0.1 million.
Interest expense decreased from $2.2 million in the quarter ended
September 30, 1994 to $1.7 million in the current year comparable quarter. Debt
levels were reduced between periods through regularly scheduled principal
payments and a prepayment of principal on the senior secured notes, a $0.5
million reduction in principal on the subordinated secured notes and a $0.8
million reduction in principal on the variable rate demand revenue bonds. In
addition, interest costs included in the September 30, 1994 quarter related to
RMCI were not incurred in the current year quarter.
Minority interests reflects the limited partners' share of income
before income taxes of the Three Rivers facility. The decrease in minority
interests between periods is due to the closure of this facility in June 1995.
FINANCIAL CONDITION
The Company records amounts due to or from third-party contractual
agencies (Medicare, Medicaid and Blue Cross) based on its best estimate, using
the principles of cost reimbursement, of amounts to be ultimately received or
paid under current and prior years' cost reports filed (or to be filed) with the
appropriate intermediaries. Ultimate settlements and other lump-sum adjustments
due from and paid to these intermediaries occur at various times during the
fiscal year. At September
10
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
30, 1995, amounts due from Medicare, Medicaid and Blue Cross totalled $2.7
million, $1.2 million and $1.4 million, respectively. Also at September 30,
1995, amounts due to Medicare, Medicaid and Blue Cross totalled $4.4 million,
$1.0 million and $0.2 million, respectively.
During the three months ended September 30, 1995, amounts owed to
minority interests decreased by a total of $0.6 million due primarily to
distributions made to the minority partners in the Three Rivers Hospital Limited
Partnership. In addition, the current portion of long-term debt increased
approximately $2.5 million since June 30, 1995 because, on September 30, 1995,
$3.1 million in principal on the senior secured notes came due within one year.
This increase was offset by a $0.2 million principal payment on the subordinated
secured notes and a $0.5 million reduction in the amount drawn under the working
capital facility during the September 1995 quarter.
The Company has net deferred tax assets of approximately $8.9 million
at September 30, 1995. Management has considered the effects of implementing
tax planning strategies, consisting of the sales of certain appreciated
property, as the primary basis for not recognizing a valuation allowance related
to its deferred tax assets at September 30, 1995. The ultimate realization of
deferred tax assets may be affected by changes in the underlying values of the
properties considered in the Company's tax planning strategies, which values are
dependent upon the operating results and cash flows of the individual
properties. The Company evaluates the realizability of its deferred tax assets
on a quarterly basis by reviewing its tax planning strategies and assessing the
need for a valuation allowance.
LIQUIDITY AND CAPITAL RESOURCES
The Company's credit facilities include $34.2 million in senior
secured notes, approximately $21 million in letters of credit, $2.1 million in
subordinated secured notes and $2.0 million in a working capital facility. The
senior secured notes bear interest at 11.6% and are payable as follows: (a) $3.1
million due on September 30, 1996, (b) semi-annual principal payments of $3.5
million from March 31, 1997 through September 30, 1998 and (c) semi-annual
principal payments of $5.65 million from March 31, 1999 through March 31, 2000.
The subordinated secured notes bear interest at 15.6% and require semi-annual
principal payments of $0.2 million through March 31, 2000. Required annual
principal payments on the variable rate demand revenue bonds total $0.8 million
through year 2000 and $0.9 million to $1.3 million in years 2001 through 2015.
Amounts outstanding under the working capital facility, which totalled $1.0
million at September 30, 1995, bear interest at a variable rate. The amount
drawn is structured as a revolving credit loan, bearing interest at 8.3% and
renewable in 30, 60 and 90-day increments, at the option of the Company. Under
the provisions of the Company's Credit Agreement, which governs the terms of the
letters of credit and the working capital facility, amounts outstanding under
the working capital facility must be reduced to zero for 30 consecutive days in
each fiscal year.
In September 1995, the Company and the banks supporting the Credit
Agreement agreed to terms which extend the expiration date of the Credit
Agreement from May 15, 1996 to February 15, 1997. In connection with this
extension, the Company agreed to reduce the banks' exposure (through regular
principal payments on the variable rate demand revenue bonds outstanding, early
redemption of certain of these bonds and/or elimination of the working capital
facility) by $2.8 million on or
11
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
before December 31, 1995 and an additional $3 million on or before July 1, 1996.
Management expects to satisfy the December 31, 1995 reduction in the banks'
exposure by paying back the amount currently drawn and eliminating the working
capital facility.
At the current time, the Company does not have any commitments to make
any material capital expenditures. The Company's current primary cash
requirements relate to its normal operating expenses, the requirement to reduce
its banks' credit exposure as discussed above, routine capital improvements at
its facilities and selective expansion of outpatient programs and services. In
addition, at the current time, the Company's specific development projects
include expansion of its contract services division and its network of
affiliations with medical/surgical hospitals and other healthcare providers.
Construction costs related to the Company's subacute business were completed
during fiscal 1995 and this business began generating positive cash flow from
operations in the fourth quarter of fiscal 1995. Also, during 1995, the Company
closed outpatient day treatment centers and other outpatient clinics which were
experiencing negative cash flow.
On the basis of its historical experience and projected cash needs,
the Company believes that its existing cash resources, internally generated
funds from operations and funds derived from any future asset sales will be
sufficient to fund its current cash requirements and future identifiable needs.
At the present time, the Company does not have any agreement to sell any of its
assets.
OTHER MATTERS
In October 1995, a corporate affiliate of Paul J. Ramsay, the Chairman
of the Board of the Company, acquired through private placement an aggregate of
275,863 shares of common stock of the Company at a price of $3.625 per share.
Of the total shares acquired, 121,363 were issued for cash and 154,500 were
issued for management fees due during the remainder of the Company's current
fiscal year under the Company's management agreement with another corporate
affiliate of Mr. Ramsay. With the issuance of the additional shares, the voting
power of the interests in the Company controlled by Mr. Ramsay increased from
approximately 30.9% to approximately 32.9%.
12
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits required to be filed as part of this Quarterly
Report on Form 10-Q are as follows:
Exhibit 10.99
Second Amendment to Credit Agreement dated as of September 15, 1995
among the Company and certain of its subsidiaries named therein,
Societe Generale, New York Branch, First Union National Bank of North
Carolina and Hibernia National Bank, as lenders, and Societe Generale,
as issuing bank and agent.
Exhibit 10.100
Fourth Supplemental Trust Indenture dated as of September 15, 1995
between the Company, Bountiful Psychiatric Hospital, Inc., Cumberland
Mental Health, Inc., East Carolina Psychiatric Services Corporation,
Havenwyck Hospital, Inc., Mesa Psychiatric Hospital, Inc. and
Psychiatric Institute of West Virginia, Inc. and NationsBank of
Georgia, National Association and Elizabeth Talley, as Trustees.
Exhibit 10.101
Amended and Restated Stock Purchase Agreement dated October 12, 1995 by
and among Paul Ramsay Holdings Pty. Limited, Ramsay Health Care, Inc.
and, solely for the purposes of Section I, III and VI of the agreement,
Ramsay Health Care Pty. Limited.
Exhibit 10.102
Amendment to Rights Agreement, dated October 3, 1995 between Ramsay
Health Care, Inc. and First Union National Bank of North Carolina, as
Rights Agent.
Exhibit 11
Computation of Net Income per Share
Exhibit 27
Financial Data Schedule
13
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
(b) Current Reports on Form 8-K
During the quarter ended September 30, 1995, the Company filed the
following Current Reports on Form 8-K with the Commission:
* Form 8-K dated August 1, 1995 relating to the Company's adoption
of a Stockholder Rights Plan.
* Form 8-K dated June 30, 1994 relating to the acquisition of a
business on June 30, 1994. This filing was made during the quarter ended
September 30, 1995, pursuant to applicable rules of the Commission.
* Form 8-K dated October 29, 1993 relating to the acquisition of a
business on October 29, 1993. This filing was made during the quarter
ended September 30, 1995, pursuant to applicable rules of the
Commission.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereupon duly authorized.
RAMSAY HEALTH CARE, INC.
Registrant
/s/ Daniel A. Sims
------------------------------------
Daniel A. Sims
Corporate Controller
Date: November 20, 1995
15
<PAGE>
EXHIBIT 10.99
SECOND AMENDMENT
TO
CREDIT AGREEMENT
This SECOND AMENDMENT dated as of September 15, 1995 (this "Amendment") to
the Credit Agreement dated as of May 15, 1993 (the "Credit Agreement") among
RAMSAY HEALTH CARE, INC. (the "Company"), a Delaware corporation, GREENBRIER
HOSPITAL, INC. ("Greenbrier"), a Louisiana corporation, HOUMA PSYCHIATRIC
HOSPITAL, INC. ("Houma"), a Louisiana corporation, HSA OF OKLAHOMA, INC.
("HSA"), an Oklahoma corporation, CAROLINA TREATMENT CENTER, INC. ("Carolina"),
a South Carolina corporation, GULF COAST TREATMENT CENTER, INC. ("Gulf Coast"),
a Florida corporation, and ATLANTIC TREATMENT CENTER, INC. ("Atlantic"), a
Florida corporation, as Borrowers (collectively, the "Borrowers"), GREAT PLAINS
HOSPITAL, INC., a Missouri corporation, and THE HAVEN HOSPITAL, INC., a Delaware
corporation, as Guarantors (collectively, the "Guarantors"), SOCIETE GENERALE, a
French banking corporation acting by and through its New York Branch, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association, and
HIBERNIA NATIONAL BANK, a national banking association, as Lenders
(collectively, the "Lenders"), and SOCIETE GENERALE, as the issuer of the
Letters of Credit described in the Credit Agreement (in such capacity, the
"Issuing Bank") and as agent for the Lenders as provided in the Credit Agreement
(in such capacity, the "Agent"),
W I T N E S S E T H :
A. Pursuant to the Credit Agreement, at the request of the Borrowers, the
Issuing Bank issued the Letters of Credit to support certain Bonds theretofore
issued to finance certain hospital assets for the benefit of the Borrowers.
Subsequent to the original issuance of the Letters of Credit, (i) the Letter of
Credit issued for the account of Atlantic was terminated in connection with the
sale of Atlantic's hospital assets and (ii) the other Letters of Credit have
been reduced in connection with mandatory sinking fund payments of principal of
the Bonds supported by such Letters of Credit. As of the date of this Amendment,
the outstanding Letters of Credit and the respective amounts thereof are as
follows:
<PAGE>
<TABLE>
<CAPTION>
LETTER OF INTEREST
ACCOUNT CREDIT PRINCIPAL INTEREST COVERAGE
PARTY AMOUNT COMPONENT COMPONENT CALCULATION
------- ------------------ ----------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Greenbrier $ 5,553,958.34 $ 5,300,000.00 $253,958.34 115 days @ 15%
360-day year
Houma 3,665,410.95 3,500,000.00 165,410.95 115 days @ 15%
365-day year
HSA 3,236,740.00 3,100,000.00 136,740.00 115 days @ 14%
365-day year
Carolina 4,610,833.34 4,400,000.00 210,833.34 115 days @ 15%
360-day year
Gulf Coast 3,974,166.66 3,800,000.00 174,166.66 110 days @ 15%
------------------ ----------------- -------------------- 360-day year
TOTAL $21,041,109.29 $20,100,000.00 $941,109.29
</TABLE>
B. The Credit Agreement also provided for Revolving Credit Loans by the
Lenders to the Company up to a maximum aggregate outstanding principal balance
of $4,000,000 to provide working capital for conducting the operations of the
Company and certain of its consolidated subsidiaries. Pursuant to Section
2.04(g) of the Credit Agreement, by letter dated as of April 12, 1995, the
Company irrevocably elected to permanently reduce the Revolving Credit Maximum
Commitment Amount from $4,000,000 to $2,000,000. Pursuant to the Credit
Agreement, the Lenders' Revolving Credit Commitment expires on May 15, 1996.
C. As of the date of this Amendment, the maximum credit available to be
outstanding for the benefit of the Borrowers pursuant to the Credit Agreement
(the Maximum Credit Availability as defined herein) is $23,041,109.29 (up to
$21,041,109.29 under the Letters of Credit or, in the event of conversion to one
or more Term Loans, up to $20,100,000.00 under the Term Loan Commitments, plus
up to $2,000,000.00 under the Revolving Credit Commitment).
D. Pursuant to a Consent and Amendment dated as of April 12, 1995 among
the Borrowers, the Guarantors, the Lenders, the Issuing Bank and the Agent (the
"First Amendment"), (i) the Agent, on behalf of the Lenders, consented to the
consummation of certain sale-leaseback transactions between two wholly-owned
subsidiaries of the Company and Capstone Capital Corporation and (ii) Section
2.04(f) of the Credit Agreement was amended by adding the following provision to
the end of such Section:
2
<PAGE>
"; provided that no proceeds of the Revolving Credit Loans shall be used
by the Company to fund working capital or other capital needs of Mesa
Psychiatric Hospital, Inc."
E. The Borrowers have requested the Lenders, the Agent and the Issuing
Bank (collectively in such capacities, the "Banks") (1) to extend the stated
expiration date of the Letters of Credit from May 15, 1996 to February 15, 1997,
(2) to extend the Revolving Credit Termination Date from May 15, 1996 to
February 15, 1997, and (3) to agree to certain amendments to the Credit
Agreement. Upon the terms and conditions set forth in this Amendment, the Banks
are willing (a) to extend the stated expiration date of the Letters of Credit,
(b) to extend the Revolving Credit Termination Date, and (c) to agree to certain
amendments to the Credit Agreement, all as hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and the understandings
herein set forth and intending to be legally bound, the Borrowers, the
Guarantors, the Lenders, the Issuing Bank and the Agent hereby agree as follows:
1. Definitions. As used in this Amendment and in the Credit Agreement,
the term "Agreement" shall mean the Credit Agreement as amended by the First
Amendment and this Amendment. All terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Credit Agreement, as
certain of such meanings are amended as hereinafter provided. In addition, as
used in this Amendment and the Credit Agreement, the following terms shall have
the meanings specified below:
"EBITDA" as to any Person means, with respect to a specified 12-month
period, (i) Pre-Tax Net Income for such 12-month period, plus (ii) all Interest
Expense for such 12-month period, plus (iii) all depreciation expense,
amortization of financing charges and other non-cash expense for such 12-month
period.
"Maximum Credit Availability" means the maximum credit available to be
outstanding for the benefit of the Borrowers pursuant to the Credit Agreement,
including (i) the total of the Letter of Credit Amounts, plus the aggregate
amount of any unreimbursed draws under the Letters of Credit, or the principal
amount of any outstanding Term Loans in the event of conversion to one or more
Term Loans, plus (ii) the Revolving Credit Maximum Commitment Amount.
2. Extension of Letters of Credit. The Borrowers hereby request the
Banks to extend the stated expiration date of the Letters of Credit to February
15, 1997. Subject to the payment of the extension fee set forth in section 4 of
this
3
<PAGE>
Amendment and to the other conditions precedent hereinafter set forth, the
Issuing Bank will extend the stated expiration date of the Letters of Credit to
February 15, 1997, such extension to be effected through the issuance by the
Issuing Bank to the Greenbrier Trustee, the Houma Trustee, the HSA Trustee, the
Carolina Trustee and the Gulf Coast Trustee, respectively, of an Amendment No. 1
to each of the outstanding Letters of Credit effective as of September 15, 1995.
3. Extension of Revolving Credit Termination Date. The Company hereby
requests the Lenders to extend the Revolving Credit Termination Date to February
15, 1997. Subject to the payment of the extension fee set forth in section 4 of
this Amendment and to the other conditions precedent hereinafter set forth, the
Lenders agree that the Credit Agreement is hereby amended to extend the
Revolving Credit Termination Date (and thereby extend the maturity date of the
Revolving Credit Note) to February 15, 1997.
4. Extension Fee. On the date of execution and delivery of this
Amendment, the Company shall pay to the Agent in immediately available funds a
nonrefundable extension fee in the amount of $50,000. Such extension fee shall
be shared by the Lenders pro rata on the basis of their respective Percentages.
5. Amendments to Credit Agreement.
5.1 The definitions of the following terms set forth in Section
1.01 of the Credit Agreement are hereby amended and restated in full as follows:
"Base Rate Increment" means one percent (1%) per annum.
"Commitment Fee Rate" means, at any time, (i) two and
three-quarters percent (2 3/4%) per annum if the Debt Service and Lease
Payment Coverage Ratio of the Consolidated Companies for the most recent
12-month period for which financial statements of the Consolidated
Companies have been provided to the Agent pursuant to Section 7.12 is
greater than 1.25 to 1, (ii) three percent (3%) per annum if such Debt
Service and Lease Payment Coverage Ratio is equal to or less than 1.25
to 1 and equal to or greater than 1.00 to 1, and (iii) four percent (4%)
per annum if such Debt Service and Lease Payment Coverage Ratio is less
than 1.00 to 1; provided that, if and so long as such Debt Service and
Lease Payment Coverage Ratio of the Consolidated Companies is greater
than 1.25 to 1 and no Event of Default has occurred and is continuing,
the Commitment Fee Rate shall be reduced by one-
4
<PAGE>
quarter percent (1/4%) for each permanent reduction from and after
September 15, 1995 of $3,000,000 in the Maximum Credit Availability.
"Eurodollar Rate Increment" means two and three-quarters
percent (2 3/4%) per annum.
"Long-Term Debt" means all Debt which, on the date of
incurrence, has a final maturity or term greater than one year or which
is renewable at the option of the debtor for a term greater than one
year from the date of original incurrence.
5.2. Section 2.03(a) of the Credit Agreement is hereby amended
and restated in full as follows:
(a) Conversion to Term Loans. With respect to each
Letter of Credit, the Lenders agree that, subject to and upon
satisfaction of the terms and conditions contained in this Section and
so long as the Term Loan Commitments have not theretofore been
terminated, the aggregate amount of the related Subsidiary Borrower's
unpaid reimbursement obligations under Section 2.02 on the date
specified by the Company pursuant to Section 2.03(b)(1) in respect of
amounts drawn against the Principal Component of the Letter of Credit
Amount of such Letter of Credit shall be converted to a Term Loan on
such date. The original principal amount of each Term Loan shall not
exceed the lesser of (1) the related Term Loan Commitment Amount, (2)
the aggregate Outstanding balance of the related Bonds immediately prior
to the payment of the final drawing under the related Letter of Credit,
less (i) the aggregate amount of all moneys held by the respective
Trustee in the funds established under the related Indenture available
to reimburse the Lenders, (ii) the principal of the related Bonds (other
than Pledged Bonds) which will remain outstanding after the final
drawing under the related Letter of Credit, and (iii) the principal
amount of the related Bonds for which refunding bonds have been or will
be issued, and (3) 75% of the then current appraised value of the real
property of the Subsidiary Borrower to which such Term Loan is being
made which is subject to a first lien priority Mortgage that will secure
such Term Loan, plus 75% of the appraisal value of any additional real
property collateral provided by the Obligors and satisfactory to the
Lenders in which the Lenders already have or are given a first lien
priority mortgage so as to result in a Term Loan to collateral value
ratio of not greater than 75% (provided that in
5
<PAGE>
calculating such ratio there shall be deducted from the appraised value
of any such additional collateral the amount thereof allocated to
provide collateral coverage at the same ratio for any and all other
obligations owing to the Lenders secured by such collateral). With
respect to each Subsidiary Borrower, the related Term Loan Commitment
and the Lenders' obligation to permit conversion to a Term Loan under
this Section shall terminate as of the close of business of the Agent at
its Lending Office on the first to occur of (A) the date the related
Letter of Credit terminates, (B) the first date on which there are no
longer any related Bonds Outstanding other than Bonds secured by a
Substitute Letter of Credit, and (C) the date the Agent terminates the
Term Loan Commitments pursuant to Section 8.02.
5.3. Section 2.03(b)(3) of the Credit Agreement is hereby amended and
restated in full as follows:
(3) Receipt by the Agent of (i) an endorsement to the mortgage
title insurance policy delivered pursuant to Section 4.04 insuring, in
favor of the Agent for the benefit of the Lenders, that the Mortgage
delivered by such Subsidiary Borrower secures the Subsidiary Borrower
Note evidencing such Term Loan and that there have been no intervening
liens since the original issuance of such mortgage title insurance
policy, (ii) evidence of comparable mortgage title insurance in favor of
the Agent for the benefit of the Lenders with respect to the mortgage on
any additional real property collateral intended to satisfy the loan to
collateral value ratio requirement of Section 2.03(a), and (iii) an
appraisal (or appraisals) of the real property covered by such Mortgage
(or additional mortgage) in compliance with federal and state laws
applicable to the Lenders, prepared by an appraiser satisfactory to
Lenders, dated as of a date no more than 60 days prior to the date of
conversion to such Term Loan, valuing such real property (and any such
additional real property collateral) in an amount sufficient to provide
a Term Loan to collateral value ratio of at least 75%;
5.4. Section 2.04(c) of the Credit Agreement is hereby amended and
restated in full as follows:
(c) Revolving Credit Interest Rate. The unpaid principal
balance of each Revolving Credit Loan shall bear interest from the date
such Revolving Credit Loan is made until the principal balance thereof
is
6
<PAGE>
paid in full at a fluctuating rate per annum equal to (1) in the
case of a Base Rate Loan, the Base Rate plus one percent (1%)
per annum, computed for the actual number of days elapsed
(including the first day but excluding the last day) based on a
360-day year, and (2) in the case of a Eurodollar Loan, the
Eurodollar Rate plus two and one-half (2 1/2%) per annum,
computed for the actual number of days elapsed (including the
first day but excluding the last day) based on a 360-day year.
The Company shall pay interest on Base Rate Loans to the Agent
for the accounts of the Lenders monthly in arrears on the first
Business Day of each calendar month or, if sooner, on the
Revolving Credit Termination Date. The Company shall pay
interest on Eurodollar Loans to the Agent for the accounts of
the Lenders in arrears in the last day of the applicable
Interest Period, or, if sooner, on the Revolving Credit
Termination Date. Upon the occurrence and during the continuance
of an Event of Default, the rate of interest on the outstanding
principal balance of the Revolving Credit Loans shall be
increased to a rate per annum equal to two and one-half percent
(2 1/2%) per annum above the rate otherwise payable wth respect
to such Revolving Credit Loans at such time. Each determination
by the Agent of a Revolving Credit Loan interest rate under this
Agreement and the Revolving Credit Note shall be conclusive and
binding for all purposes, absent manifest error.
5.5. Section 2.04(e)(4) of the Credit Agreement is hereby
amended and restated in full as follows:
(a) Annual Clean-Up Period. For a clean-up period of 30
consecutive days in each Fiscal Year the aggregate amount of the
Revolving Credit Loans outstanding shall be reduced to zero, and
the Company shall prepay to the Agent for the accounts of the
Lenders the aggregate outstanding balance of all Revolving
Credit Loans, together with all accrued but unpaid interest on
such balance through the Business Day immediately preceding the
date of commencement of such clean-up period, and all other
fees, costs and amounts (if any) payable under this Agreement or
the Revolving Credit Note in connection with such prepayment on
such Business Day.
5.6. Section 2.04(f) of the Credit Agreement is hereby amended
and restated in full as follows:
(f) Use of Revolving Credit Proceeds. The proceeds of
the Revolving Credit Loans shall be used by
7
<PAGE>
the Company solely for working capital (including, without
limitation, short-term bridge financing of fixed assets) of the
Obligors, the Life Company Subsidiaries and the Other Revolving
Credit Subsidiaries; provided that no proceeds of the Revolving
Credit Loans shall be used by the Company to fund working
capital or other capital needs of Mesa Psychiatric Hospital,
Inc. In no case shall such proceeds be used, directly or
indirectly, to pay reimbursement obligations with respect to the
Letters of Credit or to repay the Life Company Senior Notes, the
Life Company Subordinated Notes or any other Debt of the Company
or any of its Subsidiaries.
5.7. Section 7.12(a) of the Credit Agreement is hereby amended
by adding the following clauses (7) and (8) to the end of such Section:
(7) a report as of the end of such quarter of the
Obligors' status with respect to (i) permitted additional debt
incurred pursuant to Section 7.13, permitted loans, advances,
capital expenditures and other investments made pursuant to
Section 7.20 (provided that such requirement to report the
Obligors' status with respect to Section 7.20 shall start with
the fiscal quarter ending December 31, 1995), and permitted
obligations under Operating Leases under Section 7.22; and
(8) a report on the current status of any and all
significant ongoing efforts or proposals to sell any of the
hospital facilities operated by any of the Subsidiary Borrowers
(including specific information with respect to the Harbor Oaks
Hospital and the Coastal Carolina Hospital) or by any of the
Guarantors, the Life Company Subsidiaries or the Other
Consolidated Subsidiaries; provided that any and all significant
developments occurring with respect to any such proposed sales
shall be reported to the Bank in writing as soon as possible and
not later than 15 days after the occurrence of such
developments.
5.8. Section 7.12 of the Credit Agreement is hereby further
amended by adding the following subsection (o) to end of Section 7.12 as an
additional requirement for information to be furnished pursuant to Section 7.12:
(o) Monthly Reports. As soon as available and in any
event within 30 days after the close of each calendar month:
8
<PAGE>
(1) unaudited consolidated and consolidating
financial statements for the Consolidated Companies,
including consolidated balance sheets and related
consolidated and consolidating statements of income as
of the end of such month and for such month and the
current Fiscal Year to the end of such month, which
shall be internally prepared and presented on a
consistent basis and, in the case of consolidated
financial statements, in accordance with GAAP (without
footnotes and subject to normal year-end adjustments);
and
(2) a report on the utilization of the
Consolidated Companies' Facilities operated by the
Consolidated Companies for such month and the current
Fiscal Year to the end of such month, including number
of beds in service, admissions, patient days, average
length of stay and occupancy, all in such reasonable
detail as the Agent may request.
5.9. Section 7.16 of the Credit Agreement is hereby amended and
restated in full as follows:
(a) Consolidated Maximum Annual Debt Service and Lease Payment
Coverage Ratio. The Obligors will maintain, and the Company will cause
the other Consolidated Companies to maintain, as to the Consolidated
Companies on a consolidated basis, as of the end of each fiscal quarter
of the Consolidated Companies for the 12-month period then ended, a
Maximum Annual Debt Service and Lease Payment Coverage Ratio of at least
the following amounts from and after the date indicated:
<TABLE>
<CAPTION>
From and Maximum Annual Debt Service
after June 30 and Lease Payment Coverage Ratio
- ------------- --------------------------------
<S> <C>
1995 1.00 to 1
1996 1.10 to 1
</TABLE>
(b) Consolidated Fixed Charge Coverage Ratio. The Obligors will
maintain, and the Company will cause the other Consolidated Companies to
maintain, as to the Consolidated Companies on a consolidated basis, as
of the end of each fiscal quarter of the Consolidated Companies for the
12-month period then ended, a Fixed Charge Coverage Ratio of at least
the following amounts from and after the date indicated:
9
<PAGE>
<TABLE>
<CAPTION>
From and
after June 30 Fixed Charge Coverage Ratio
- ------------- ---------------------------
<S> <C>
1995 1.50
1996 1.75
</TABLE>
(c) Consolidated Current Ratio. The Obligors will maintain, and
the Company will cause the other Consolidated Companies to maintain, as
to the Consolidated Companies on a consolidated basis at all times a
Current Ratio of at least 1.50 to 1.
(d) Consolidated Leverage Ratio. The Obligors will maintain, and
the Company will cause the other Consolidated Companies to maintain, as
to the Consolidated Companies on a consolidated basis at all times a
Leverage Ratio of not more than 1.50 to 1.
(e) Consolidated Tangible Net Worth. The Obligors will maintain,
and the Company will cause the other Consolidated Companies to maintain,
at all times a Consolidated Tangible Net Worth of at least $48,000,000.
(f) Additional Maximum Annual Debt Service and Lease Payment
Coverage Ratio. The Subsidiary Borrowers and Guarantors will maintain,
as a consolidated group, as of the end of each fiscal quarter of such
group for the 12-month period then ended, a Maximum Annual Debt Service
and Lease Payment Coverage Ratio of at least 3.00 to 1.
(g) Short-Term Debt. The Obligors will not permit, and the
Company will cause the other Consolidated Companies not to permit,
Short-Term Debt of the Consolidated Companies on a consolidated basis to
exceed at any time an amount equal to $2,000,000; and for at least 30
consecutive days during each Fiscal Year the Obligors will reduce, and
the Company will cause the other Consolidated Companies to reduce, the
aggregate outstanding principal amount of Short-Term Debt of the
Consolidated Companies on a consolidated basis to zero.
5.10 Section 7.22 of the Credit Agreement is hereby amended and
restated in full as follows:
Section 7.22. Operating Lease Obligations. The Obligors will not
create or incur, and the Company will not permit the other Consolidated
Companies to create or incur, any obligations for the payment by the
Consolidated Companies of rentals for any property under Operating
Leases, except for Operating Leases
10
<PAGE>
which, together with all other Operating Leases of the Consolidated
Companies (including, without limitation, the Consolidated Companies
existing Operating Leases with Capstone Capital Corporation and Charter
Canyon Behavioral Health System, Inc.), provide for aggregate annual
rental payments by the Consolidated Companies on a consolidated basis in
the current or any future Fiscal Year not exceeding $5,000,000.
5.11. Section 7.24 of the Credit Agreement is hereby amended and
restated in full as follows:
Section 7.24. Management Agreements. The Obligors will not pay,
and the Company will not permit any of the other Consolidated Companies
to pay, any Ramsay Management Fees, except Ramsay Management Fees
payable by the Company to any Paul Ramsay Affiliate pursuant to the
Ramsay Management Agreement; provided that (i) the Company's obligation
to pay Ramsay Management Fees shall be subordinate to all amounts now or
hereafter owing by the Company to the Agent, the Issuing Bank of the
Lenders under the Credit Documents, (ii) the Company's obligations to pay
Ramsay Management Fees for services rendered during each Fiscal Year
shall accrue and may be paid in common stock of the Company at any time,
but shall not be paid in cash or other property (except such common
stock) until after the close of such Fiscal Year, and then such payment
shall be permitted only if, with respect to the Company's Fiscal Year
ending June 30, 1996, the Consolidated Companies' EBITDA for such Fiscal
Year (as shown on the Consolidated Companies audited financial statements
for such Fiscal Year furnished to the Agent pursuant to the Credit
Agreement) is at least $17,800,000 (less amounts reasonably acceptable to
the Lenders in its discretion to reflect the reduction in budgeted
earning capacity in such Fiscal Year allocable to any operating assets
disposed of prior to the close of such Fiscal Year), and with respect to
each Fiscal Year thereafter, the Consolidated Companies' EBITDA for such
Fiscal Year (as shown on the Consolidated Companies audited financial
statements for such Fiscal Year furnished to the Agent pursuant to the
Credit Agreement) is at least 90% of the Company's budget therefor as
presented to the Lenders prior to September 15, 1995 or as thereafter
presented to and approved by the Lenders at their discretion (less
amounts reasonably acceptable to the Lenders in its discretion to reflect
the reduction in budgeted earning capacity in such Fiscal Year allocable
to any operating assets disposed of prior to the close of such Fiscal
Year).
11
<PAGE>
The Company will cause Ramsay Health Care Pty. Ltd to execute and
deliver to the Agent and the Lenders on the Closing Date a Ramsay
Management Fee Subordination Agreement (the "Ramsay Management Fee
Subordination Agreement") pursuant to which Ramsay Health Care Pty. Ltd
will subordinate all present and future claims to Ramsay Management Fees
owing under the Ramsay Management Agreement (or any successor management
agreement) to all amounts now or hereafter owing by any Obligor under the
Credit Documents. The Company will not (i) amend, modify or supplement
the Ramsay Management Agreement, other than one or more extensions of the
term thereof on the same terms and conditions as are in effect on the
Closing Date and other than an assignment thereof by a Paul Ramsay
Affiliate to another Paul Ramsay Affiliate (in each case subject to the
Ramsay Management Fee Subordination Agreement), (ii) enter into any other
management agreement with Paul J. Ramsay or any Paul Ramsay Affiliate, or
(iii) enter into any management agreement with any other Person (other
than a Consolidated Company) with respect to the management by such
Person of material operations of any Obligor or of the Consolidated
Companies taken as a whole.
5.12. Article VII of the Credit Agreement is hereby amended by adding
the following Sections 7.33 and 7.34 to the end of such Article:
Section 7.33. Limitation on Dividends and Purchases of Shares. The
Company will not pay dividends (other than dividends payable exclusively
in common stock of the Company) on or purchase any shares of any class of
its common or preferred stock, unless (i) with respect to dividends to
be paid or shares to be purchased during the Company's fiscal ending June
30, 1996, the Consolidated Companies' Maximum Annual Debt Service and
Lease Payment Coverage Ratio for the Fiscal Year ended June 30, 1995 is
more than 1.30 to 1 (as shown on the Consolidated Companies' audited
financial statements for such Fiscal Year furnished to the Agent pursuant
to the Credit Agreement), and with respect to dividends to be paid or
shares to be purchased after June 30, 1996, the Consolidated Companies'
Maximum Annual Debt Service and Lease Payment Coverage Ratio for the
immediately preceding Fiscal Year of the Consolidated Companies is at
least 1.50 to 1 (as shown on the Consolidated Companies' audited
financial statements for such Fiscal Year furnished to the Agent pursuant
to the Credit Agreement), (ii) no Default or Event of Default has
12
<PAGE>
occurred and is continuing or would occur as a result of such payment or
purchase, and (iii) the aggregate amount of any and all such dividends
and purchases is less than 50% of the Net Income of the Consolidated
Companies for the immediately preceding Fiscal Year of the Consolidated
Companies (as shown on the Consolidated Companies' audited financial
statements for such Fiscal Year furnished to the Agent pursuant to the
Credit Agreement); provided that the payment of dividends by the Company
of not more than $387,200 on the Company's Class B and Class C
convertible preferred stock shall be permitted in any Fiscal Year as long
as no Default or Event of Default has occurred and is continuing or would
occur as a result of such payment.
Section 7.34. Reduction of Maximum Credit Availability. The
Borrowers will cause the Maximum Credit Availability to be reduced to not
more than $20,308,364.72 by December 31, 1995, and to not more than
$17,145,835.32 by July 1, 1996, through permanent reductions in the total
of the Letter of Credit Amounts of the Letters of Credit as a result of
mandatory sinking fund redemptions and/or optional redemptions of Bonds
and/or through permanent reductions of the Revolving Credit Maximum
Commitment Amount pursuant to Section 2.04(g).
5.13. Section 8.01(c) of the Credit Agreement is hereby amended and
restated in full as follows:
(c) Failure by any Obligor to perform or comply with any of the
terms or conditions contained in Section 7.01, 7.07, 7.10, 7.13, 7.16,
7.20, 7.21, 7.22, 7.24, 7.25, 7.26, 7.27, 7.29, 7.30, 7.33 or 7.34, or
the Obligors shall grant or otherwise create any Lien or sale/lease-back
transaction in violation of Section 7.14;
5.14. The address as which notices and other communications are to be
sent to the Agent, the Issuing Bank or Societe Generale (in its capacity as a
Lender) pursuant to Section 10.01 of the Credit Agreement is hereby changed to
the following:
Societe Generale, New York Branch
1221 Avenue of the Americas, 7th Floor
New York, NY 10020
Attention: Sedare Coradin
Vice President
Telephone: (212) 278-6878
Telecopier: (212) 278-7430
13
<PAGE>
with a copy to:
Societe Generale, New York Branch
1221 Avenue of the Americas, 7th Floor
New York, NY 10020
Attention: Jeffrey Green
Assistant Treasurer
Special Letter of Credit Services
Telephone: (212) 278-6727
Telecopier: (212) 278-7428
6. Conditions Precedent. As conditions precedent to the Banks'
execution and delivery of this Amendment, the Agent shall have received the
following in form and substance satisfactory to the Banks:
(a) A certificate of the president, chief executive officer or
chief financial officer of each Obligor as of the date of execution and
delivery by the Obligors or this Amendment stating that (1) the
representations and warranties contained in Section 7 of this Amendment
are true and correct, (2) all obligations, covenants, agreements and
conditions contained in the Agreement to be performed or satisfied by
such Obligor on or prior to the date of execution and delivery by the
Obligors of this Amendment have been performed or satisfied in all
respects, (3) since June 30, 1995, there has been no material adverse
change in the properties, business, operations, assets, condition
(financial or otherwise) or prospects of such Obligor (or, in the case of
the certificate of the respective officer of the Company, the
Consolidated Companies taken as a whole) other than as disclosed in such
certificate, and (4) after given effect to this Amendment, no Default or
Event of Default has occurred and is continuing;
(b) An opinion of Haythe & Curley, New York, New York, counsel to
the Obligors, to the effect that (1) the execution and delivery by the
Obligors of this Amendment has been duly authorized by all requisite
corporate action, (2) this Amendment has been duly executed and delivered
by the Obligors and constitutes the legal, valid and binding obligation
of the Obligors enforceable against the Obligors in accordance with its
terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting the rights of creditors generally and by the
application of general principles of equity, and (3) the execution and
delivery of this Amendment does not conflict with or constitute a default
under the Life Company Indenture or the Consolidated Companies' Operating
Leases with Capstone Capital Corporation and Charter Canyon
14
<PAGE>
Behavioral Health System, Inc. or the Consolidated Companies have otherwise
obtained all requisite consents of the parties to such agreements in
connection with this Amendment; and
(c) Such other documents, certificates and opinions of counsel as the
Agent may reasonably request.
7. Representations and Warranties. The Obligors hereby represent and warrant
that:
(a) The representations and warranties made by the Obligors in the Credit
Agreement and all documents delivered in connection therewith are true and
correct on and as of the date of execution and delivery by the Obligors of this
Amendment, except to the extent that such representations and warranties
expressly relate to an earlier date. After giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing on the date of
execution and delivery by the Obligors of this Amendment.
(b) This Amendment has been duly authorized by all requisite action on
behalf of the Obligors and constitutes the legal, valid and binding obligation
of the Obligors, enforceable in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws or equitable principles affecting creditors' rights generally.
(c) The Obligors have obtained all consents and approvals necessary to their
execution and delivery of this Amendment.
8. Costs and Expenses. The Obligors hereby agree to pay on demand all costs
and expenses of the Agent and the Issuing Bank in connection with the
preparation, execution and delivery of this Amendment and the amendments
extending the Letters of Credit being delivered pursuant to section 2 of this
Amendment, including without limitation the reasonable fees and expenses of
counsel for the Agent and the Issuing Bank with respect thereto.
9. Counterparts. This Amendment may be executed in one or more counterparts
each of which shall constitute an original Amendment and all of which together
shall constitute one and the same Amendment.
10. Effect. Upon the execution and delivery of this Amendment, the Credit
Agreement shall be and be deemed to be amended as set forth in this Amendment.
All of the provisions of the Credit Agreement shall remain in full force and
effect as amended by the First Amendment and this Amendment.
15
<PAGE>
11. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law. The foregoing choice of law is made pursuant to Section
5-1401 of the General Obligations Law of the State of New York.
16
<PAGE>
IN WITNESS WHEREOF, the Obligors, the Lenders, the Issuing Bank and the
Agent have caused this Agreement to be duly executed and delivered as of the
date first above written.
[CORPORATE SEAL] RAMSAY HEALTH CARE, INC.
Attest /s/ Daniel Sims By /s/ Reynold Jennings
------------------------ --------------------------
Assistant Secretary President
[CORPORATE SEAL] GREENBRIER HOSPITAL, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
[CORPORATE SEAL] HOUMA PSYCHIATRIC HOSPITAL, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
[CORPORATE SEAL] HSA OF OKLAHOMA, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
[CORPORATE SEAL] CAROLINA TREATMENT CENTER, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
This execution page is part of the Second Amendment dated as of September 15,
1995 to the Credit Agreement dated as of May 15, 1993, among Ramsay Health Care,
Inc., Greenbrier Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of
Oklahoma, Inc., Carolina Treatment Center, Inc., Gulf Coast Treatment Center,
Inc. and Atlantic Treatment Center, Inc., as Borrowers, Great Plains Hospital,
Inc. and The Haven Hospital, Inc., as Guarantors, Societe Generale, New York
Branch, First Union National Bank of North Carolina and Hibernia National Bank,
as Lenders, Societe Generale, as Issuing Bank, and Societe Generale, as Agent.
17
<PAGE>
[CORPORATE SEAL] GULF COAST TREATMENT CENTER, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
[CORPORATE SEAL] ATLANTIC TREATMENT CENTER, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
[CORPORATE SEAL] GREAT PLAINS HOSPITAL, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
[CORPORATE SEAL] THE HAVEN HOSPITAL, INC.
Attest /s/ John Quinn By /s/ Reynold Jennings
------------------------ --------------------------
Secretary President
This execution page is part of the Second Amendment dated as of September 15,
1995 to the Credit Agreement dated as of May 15, 1993, among Ramsay Health Care,
Inc., Greenbrier Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of
Oklahoma, Inc., Carolina Treatment Center, Inc., Gulf Coast Treatment Center,
Inc. and Atlantic Treatment Center, Inc., as Borrowers, Great Plains Hospital,
Inc. and The Haven Hospital, Inc., as Guarantors, Societe Generale, New York
Branch, First Union National Bank of North Carolina and Hibernia National Bank,
as Lenders, Societe Generale, as Issuing Bank, and Societe Generale, as Agent.
18
<PAGE>
SOCIETE GENERALE, NEW YORK
BRANCH, as Lender, Issuing
Bank and Agent
By /s/ Sedare Coradin
-------------------------------
Title Vice President
----------------------------
This execution page is part of the Second Amendment dated as of September 15,
1995 to the Credit Agreement dated as of May 15, 1993, among Ramsay Health Care,
Inc., Greenbrier Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of
Oklahoma, Inc., Carolina Treatment Center, Inc., Gulf Coast Treatment Center,
Inc. and Atlantic Treatment Center, Inc., as Borrowers, Great Plains Hospital,
Inc. and The Haven Hospital, Inc., as Guarantors, Societe Generale, New York
Branch, First Union National Bank of North Carolina and HiberniaNational Bank,
as Lenders, Societe Generale, as Issuing Bank, and Societe Generale, as Agent.
19
<PAGE>
FIRST UNION BANK OF NORTH
CAROLINA, as Lender
By: /s/ John Ransom
-------------------------
Title: Senior Vice President
----------------------
This execution page is part of the Second Amendment dated as of September 15,
1995 to the Credit Agreement dated as of May 15, 1993, among Ramsay Health Care,
Inc., Greenbrier Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of
Oklahoma, Inc., Carolina Treatment Center, Inc., Gulf Coast Treatment Center,
Inc. and Atlantic Treatment Center, Inc., as Borrowers, Great Plains Hospital,
Inc. and The Haven Hospital, Inc., as Guarantors, Societe Generale, New York
Branch, First Union National Bank of North Carolina and Hibernia National Bank,
as Lenders, Societe Generale, as Issuing Bank, and Societe Generale, as Agent.
20
<PAGE>
HIBERNIA NATIONAL BANK, as
Lender
By: /s/ Ross Wales
-------------------------
Title: Banking Officer
----------------------
This execution page is part of the Second Amendment dated as of September 15,
1995 to the Credit Agreement dated as of May 15, 1993, among Ramsay Health Care,
Inc., Greenbrier Hospital, Inc., Houma Psychiatric Hospital, Inc., HSA of
Oklahoma, Inc., Carolina Treatment Center, Inc., Gulf Coast Treatment Center,
Inc. and Atlantic Treatment Center, Inc., as Borrowers, Great Plains Hospital,
Inc. and The Haven Hospital, Inc., as Guarantors, Societe Generale, New York
Branch, First Union National Bank of North Carolina and Hibernia National Bank,
as Lenders, Societe Generale, as Issuing Bank, and Societe Generale, as Agent.
21
<PAGE>
EXHIBIT 10.100
================================================================================
FOURTH SUPPLEMENTAL TRUST INDENTURE
Dated as of September 15, 1995
Between
RAMSAY HEALTH CARE, INC.,
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.,
CUMBERLAND MENTAL HEALTH, INC.,
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION,
HAVENWYCK HOSPITAL, INC.
MESA PSYCHIATRIC HOSPITAL, INC.
and
PSYCHIATRIC INSTITUTE OF WEST VIRGINIA, INC.
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
and
ELIZABETH TALLEY
As Trustees
================================================================================
<PAGE>
Table of Contents
-----------------
Section 1. Definitions...................................................
Section 1.1. Definitions Contained in the Original Indenture.......
Section 1.2. Amendment of Certain Definitions Contained in
the Original Indenture................................
Section 1.3 New Definitions.......................................
Section 2. Amendments....................................................
Section 2.1. Amendment of (S) 3.17 of the Original Indenture.......
Section 2.2 Amendment of (S) 3.18 of the Original Indenture.......
Section 3. Miscellaneous.................................................
Section 3.1. Applicability of the Original Indenture...............
Section 3.2. Counterparts..........................................
Section 3.3. No Legend Required....................................
Section 3.4. No Responsibility of Trustees for Recitals............
Section 3.5. Consent of Lenders to Supplement......................
Section 3.6. Furnishing of Documents...............................
Section 3.7. Payment of Special Counsel Fees.......................
Section 3.8. Payment of Administrative Fee.........................
<PAGE>
FOURTH SUPPLEMENTAL TRUST INDENTURE
-----------------------------------
FOURTH SUPPLEMENTAL TRUST INDENTURE dated as of September 15, 1995
(herein called the "Supplement") between RAMSAY HEALTH CARE, INC., a Delaware
corporation (the "Company"), BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., a Utah
corporation ("Bountiful Psychiatric"), CUMBERLAND MENTAL HEALTH, INC., a North
Carolina corporation ("Cumberland"), EAST CAROLINA PSYCHIATRIC SERVICES
CORPORATION, a North Carolina corporation ("East Carolina Psychiatric"),
HAVENWYCK HOSPITAL, INC., a Michigan corporation ("Havenwyck"), MESA PSYCHIATRIC
HOSPITAL, INC., an Arizona corporation ("Mesa Psychiatric"), and PSYCHIATRIC
INSTITUTE OF WEST VIRGINIA, INC., a Virginia corporation ("Psychiatric
Institute; together with the Company, Bountiful Psychiatric, Cumberland, East
Carolina Psychiatric, Havenwyck and Mesa Psychiatric collectively being
hereinafter referred to as the "Obligors"), whose post office addresses are One
Poydras Plaza, 639 Loyola Avenue, Suite 1700, New Orleans, Louisiana 70113, and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION (formerly The Citizens and Southern
National Bank), a national banking association (the "Trustee"), whose post
office address is 600 Peachtree Street, Suite 900, Atlanta Georgia 30308,
Attention: Corporate Trust Department and ELIZABETH TALLEY (the "Individual
Trustee"), whose post office address is 600 Peachtree Street, Suite 900,
Atlanta, Georgia 30308, as Trustees (the Trustee and the Individual Trustee
hereinafter collectively referred to as the "Trustees").
WHEREAS, the Obligors on April 30, 1990 issued their 11.6% Senior
Secured Notes due March 31, 2000 in the aggregate principal amount of
$56,500,000 (the "Senior Notes") and their 15.6% Subordinated Secured Notes due
March 31, 2000 in the aggregate principal amount of $3,000,000 (the
"Subordinated Notes"; and the Senior Notes and Subordinated Notes collectively,
the "Notes") under and secured by the Trust Indenture dated as of March 31, 1990
from the Obligors to the Trustees (the "First Indenture"); and
WHEREAS, the Obligors and the Trustees entered into a First
Supplemental Trust Indenture dated as of June 15, 1991 (the "First Supplemental
Indenture"), entered into a Second Supplemental Trust Indenture dated as of May
15, 1993 (the "Second Supplemental Indenture") and entered into a Third
Supplemental Trust Indenture dated as of April 12, 1995 (the "Third Supplemental
Indenture"; and the
<PAGE>
2
First Indenture as amended by the First Supplemental Indenture, the Second
Supplemental Indenture and the Third Supplemental Indenture (the "Original
Indenture"), and as hereby amended and as the same may be further amended and
supplemented from time to time being referred to as the "Indenture"); and
WHEREAS, the Obligors have requested the holders of the Senior Notes
and the Subordinated Notes to consent to certain amendments to the Indenture and
the holders of all of the Notes outstanding have consented in writing to such
changes and all other matters set forth in or effectuated by this Supplement;
and
WHEREAS, all things necessary to make this Supplement the valid
obligation of the Obligors according to its tenor and effect have been done or
authorized;
NOW, THEREFORE, in consideration of the premises and of the sum of Ten
Dollars and of other good and valuable consideration, receipt whereof upon the
delivery of this Supplement the Obligors hereby acknowledge, and in order to
strengthen the financial and operating condition of each and every Obligor,
directly or indirectly, as a result of the enhanced ability of the Company to
provide financial, accounting, consulting and administrative assistance and
services to each other Obligor, and in order to secure the payment, subject to
(S) 10 of the Indenture, of both the principal of and interest and premium, if
any, on the Notes at any time outstanding thereunder according to their tenor
and the provisions thereof, and, further subject to (S) 10 of the Indenture, to
secure the faithful performance and observance of all the covenants and
provisions in the Notes, the Note Agreements, the Pledge Agreements, the
Mortgages and in the Indenture contained, the Obligors hereby covenant and agree
with the Trustees for the equal and pro rata benefit of all present and future
holders of all Notes issued under the Indenture, subject to (S) 10 of the
Indenture, without any preference, priority or distinction as follows:
Section 1. Definitions.
Section 1.1. Definitions Contained in the Original Indenture. Except
as otherwise provided in Section 1.2 of this Supplement, words and phrases
defined in the Original Indenture shall have the same meanings ascribed to them
therein when used herein, unless the context or use indicates a different
meaning or intent.
<PAGE>
3
Section 1.2. Amendment of Certain Definitions Contained in the
Original Indenture. Unless the context otherwise requires, the following
definitions contained in Section (S) 1.1 of the Original Indenture are hereby
amended in their entirely as follows:
"'Bank Debt' shall mean (i) indebtedness for borrowed money
outstanding under the working capital facility provided under the Credit
Agreement and referred to therein as the 'Revolving Credit Loans' in an
aggregate principal amount not to exceed $2,000,000, (ii) indebtedness
outstanding under the letter of credit facility provided under the Credit
Agreement in an aggregate amount not to exceed $21,041,109.29 and referred to
therein as the 'Letters of Credit' and (iii) indebtedness outstanding under the
term loan facility provided under the Credit Agreement upon termination of the
Letters of Credit referred to in (ii) above in an aggregate principal amount not
to exceed $20,100,000 and referred to therein as the 'Term Loans'".
"'Credit Agreement' shall mean the Credit Agreement dated as of May
15, 1993, as amended as of April 12, 1995 and as of September 15, 1995, among
the Company and certain Subsidiaries, as the Borrowers, Great Plains Hospital,
Inc., and The Haven Hospital, Inc., as the Guarantors, Societe Generale, New
York Branch, First Union National Bank of North Carolina and Hibernia National
Bank, as lenders, and Societe Generale, New York Branch, as Issuing Bank and
Agent."
"'Funded Indebtedness' of any Person shall mean and include without
duplication,
(i) any obligation payable more than one year from the date of
creation thereof, which under generally accepted accounting principles is shown
on the balance sheet as a liability (including Capitalized Lease obligations but
excluding reserves for deferred income taxes and other reserves to the extent
that such reserves do not constitute an obligation),
(ii) indebtedness payable more than one year from the date of creation
thereof which is secured by any Lien on, or payable out of the proceeds of
production from, property owned by the Company or any Subsidiary, whether or not
the indebtedness secured thereby shall have been assumed by the Company or such
Subsidiary,
(iii) contingent obligations in respect of letters of credit issued
and not yet drawn upon,
<PAGE>
4
(iv) all Guaranties by such Person of Funded Indebtedness of others,
PROVIDED that if the indebtedness so guaranteed is also included in consolidated
Funded Indebtedness of such Person, the amount of such Guaranty shall not be
included as additional Funded Indebtedness,
(v) obligations under any contract providing for the making of loans,
advances or capital contributions to any other Person, or for the purchase of
any property from any Person, in each case in order to enable such Person
primarily to maintain working capital, net worth or any other balance sheet
condition or to pay debts, dividends or expenses,
(vi) obligations under any contract for the purchase of materials,
supplies or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other property
or services shall be made regardless of whether or not delivery of such
materials, supplies or other property or services is ever made or tendered,
(vii) obligations under any Capitalized Lease or contract to rent or
lease (as lessee) any real or personal property if such contract (or any related
document) provides that the obligation to make payments thereunder is absolute
and unconditional under conditions not customarily found in commercial leases or
requires that the lessee purchase or otherwise acquire securities or obligations
of the lessor,
(viii) obligations under any contract for the sale or use of
materials, supplies or other property or services if such contract (or any
related document) requires that payment for such materials, supplies or other
property or services, or the use thereof, shall be subordinated to any
indebtedness (of the purchaser or user of such materials, supplies or other
property or the Person entitled to the benefit of such services) owed or to be
owed to any Person,
(ix) obligations under any other contract which, in economic effect,
is substantially equivalent to a guarantee, and
(x) all capital stock of Subsidiaries of such Person which has a
preference as to dividends or upon liquidation and which is not owned by such
Person, either directly or through Subsidiaries of such Person,
all as determined in accordance with generally accepted accounting
principles. Notwithstanding anything herein to the contrary, 'FUNDED
INDEBTEDNESS' of the Company
<PAGE>
5
or any Consolidated Subsidiary shall not include (i) Subordinated Funded
Indebtedness, (ii) indebtedness outstanding under the working capital facility
of the Credit Agreement in a principal amount not to exceed $2,000,000 or (iii)
Practice Guaranties. 'CONSOLIDATED' when used as a prefix to any Funded
Indebtedness shall mean the aggregate amount of all such Funded Indebtedness of
the Company and its Consolidated Subsidiaries on a consolidated basis
eliminating intercompany items."
"'Superior Indebtedness' shall mean (i) all obligations, liabilities
and indebtedness of the Obligors to the holders of the Senior Secured Notes in
an aggregate principal amount not to exceed $56,500,000 arising under the Senior
Secured Notes, the Note Purchase Agreements and this Indenture, (ii) all
obligations, liabilities and indebtedness in an aggregate amount not to exceed
$21,041,109.29 created or arising under certain industrial development bonds of
the Company or its Subsidiaries and associated letters of credit and
reimbursement obligations in connection therewith under the Credit Agreement
(including extensions, renewals and refundings thereof without increase in the
outstanding principal amount under such facility at such time), (iii) all
obligations, liabilities and indebtedness outstanding under the Credit Agreement
in an aggregate principal amount not to exceed $2,000,000 arising under the
"Revolving Loan Commitment" provided in the Credit Agreement (including
extensions, renewals and refundings thereof without increase in the outstanding
principal amount under such facility at such time), (iv) all obligations,
liabilities and indebtedness outstanding under the Credit Agreement arising
under the "Term Loans" provided in the Credit Agreement in an aggregate
principal amount not to exceed $20,100,000 (including extensions, renewals and
refundings thereof without increase in the outstanding principal amount under
such facility at such time), and (v) additional indebtedness incurred after the
date of the Original Indenture in an aggregate principal amount not to exceed
$25,000,000, PROVIDED that all proceeds of such additional indebtedness are used
exclusively to finance the acquisition, construction or renovation of facilities
owned or acquired by the Company or any Subsidiary. Interest accrued on the
indebtedness described in the foregoing clauses (i), (ii), (iii), (iv) and (v)
shall constitute "Superior Indebtedness" regardless of whether such interest
accrues before or after the commencement of any bankruptcy, insolvency or
receivership proceedings."
<PAGE>
6
Section 1.3. New Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein in the Indenture shall have the
following meanings and the following definitions shall be equally applicable to
both the singular and plural forms of any of the terms herein defined:
"'Fourth Supplemental Indenture' shall mean the Fourth Supplemental
Trust Indenture dated as of September 15, 1995 between the Obligors and the
Trustees."
Section 2. Amendments.
Section 2.1. Amendment of (S) 3.17 of the Original Indenture. (S) 3.17 of
the Original Indenture is hereby amended in its entirety as follows:
"SECTION 3.17. FIXED CHARGE COVERAGE. The Company will, as of the
end of each fiscal quarter, keep and maintain the ratio of (i) the sum of
(A) Consolidated Cash Flow plus (B) Rentals to (ii) Fixed Charges for the
most recent four fiscal quarters, at not less than (x) 1.5 to 1, in the
case of any determination being made hereunder on or prior to December 31,
1995, (y) 1.75 to 1, in the case of any determination being made as of the
end of the fiscal quarter ending March 31, 1996, and (z) 2.0 to 1, in the
case of any determination being made hereunder at any time after March 31,
1996."
Section 2.2. Amendment of (S) 3.18 of the Original Indenture. (S)
3.18 of the Original Indenture shall be amended as follows:
(a) (S) 3.18(A)(2) of the Original Indenture is hereby amended in its
entirety as follows:
"(2) the Bank Debt, PROVIDED that during the twelve-month period
prior to May 15, 1993, there shall have been a period of 45
consecutive days during which the Company and each of its Consolidated
Subsidiaries shall have been free of all Indebtedness outstanding
under the working capital facility of the Old Credit Agreement,
FURTHER PROVIDED that during the twelve-month period immediately
preceding the date of any determination hereunder occurring on or
after May 15, 1994 and prior to September 15, 1995, there shall have
been a period of 45 consecutive days during which the Company and each
of its
<PAGE>
7
Consolidated Subsidiaries shall have been free of Indebtedness
outstanding under the "Revolving Credit Loans" facility of the Credit
Agreement in an amount equal to at least 75% of the "Revolving Credit
Maximum Commitment Amount" (as such term is defined in the Credit
Agreement as originally executed), and FURTHER PROVIDED that during
the twelve-month period immediately preceding the date of any
determination hereunder occurring on or after September 15, 1995,
there shall have been a period of 30 consecutive days during which the
Company and each of its Consolidated Subsidiaries shall have been free
of Indebtedness outstanding under the "Revolving Credit Loans"
facility of the Credit Agreement;"
(b) (S) 3.18(A)(4) of the Original Indenture is hereby amended in its
entirety as follows:
"(4) Funded Indebtedness issued or incurred for the purpose of
extending, renewing or refinancing (y) Funded Indebtedness outstanding
as of the date of execution and delivery of the Fourth Supplemental
Indenture and (z) that portion of the Bank Debt constituting Funded
Indebtedness issued or incurred from time to time under the Credit
Agreement, PROVIDED that in either case the principal amount of Funded
Indebtedness extended, renewed or refinanced does not exceed the
principal amount of such Funded Indebtedness outstanding immediately
preceding such extension, renewal or refinancing;"
(c) (S) 3.18(A)(7) of the Original Indenture is hereby amended in its
entirety as follows:
"(7) unsecured Current Indebtedness of the Company and its
Consolidated Subsidiaries, PROVIDED that during the twelve-month
period prior to May 15, 1993, there shall have been a period of 45
consecutive days during which the Company and each of its Consolidated
Subsidiaries shall have been free of (x) all Indebtedness outstanding
under the working capital facility of the Old Credit Agreement and (y)
all other Current Indebtedness, PROVIDED FURTHER that during the
twelve-month period immediately preceding the date of any
determination hereunder occurring on or after May 15, 1994 and prior
to September 15, 1995, there shall have been a period of 45
consecutive days during which the Company and each
<PAGE>
8
of its Consolidated Subsidiaries shall have been free of (x)
Indebtedness outstanding under the "Revolving Credit Loans" facility
of the Credit Agreement in an amount equal to at least 75% of the
"Revolving Loan Maximum Commitment Amount" (as such term is defined in
the Credit Agreement as originally executed) and (y) all other Current
Indebtedness, and PROVIDED FURTHER that during the twelve-month period
immediately preceding the date of any determination hereunder
occurring on or after September 15, 1995, there shall have been a
period of 30 consecutive days during which the Company and each of its
Consolidated Subsidiaries shall have been free of (x) Indebtedness
outstanding under the "Revolving Credit Loans" facility of the Credit
Agreement and (y) all other Current Indebtedness;"
(d) (S) 3.18(A)(15) of the Original Indenture is hereby amended in
its entirety as follows:
"(15) additional Current Indebtedness incurred under the
"Revolving Credit Loans" facility of the Credit Agreement in an
aggregate principal amount not to exceed $2,000,000, PROVIDED that, at
the time of the issuance or incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof:
(i) Consolidated Funded Indebtedness shall not exceed the
following percentages of Total Capitalization:
PERCENTAGE
OF TOTAL
PERIOD CAPITALIZATION
July 1, 1992 thru June 30, 1993 69%
July 1, 1993 and thereafter 65%
(ii) the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow for the most recent four fiscal quarters
shall not exceed 4.0 to 1;
(iii) the sum of Consolidated Cash Flow plus Rentals for the
most recent four fiscal quarters shall be not less than 1.5 times
proforma Consolidated Debt Service for the immediately succeeding
four fiscal quarters; and
<PAGE>
9
(iv) No Default or Event of Default shall have occurred and
be continuing;
PROVIDED FURTHER that during the twelve-month period immediately preceding the
date of any determination hereunder occurring on or after May 15, 1994 and prior
to September 15, 1995, there shall have been a period of 45 consecutive days
during which the Company and each of its Consolidated Subsidiaries shall have
been free of (x) Indebtedness outstanding under the "Revolving Credit Loans"
facility of the Credit Agreement in an amount equal to at least 75% of the
"Revolving Credit Maximum Commitment Amount" (as such term is defined in the
Credit Agreement as originally executed) and (y) all other Current Indebtedness,
and PROVIDED FURTHER that during the twelve-month period immediately preceding
the date of any determination hereunder occurring on or after September 15,
1995, there shall have been a period of 30 consecutive days during which the
Company and each of its Consolidated Subsidiaries shall have been free of (x)
Indebtedness outstanding under the "Revolving Credit Loans" facility of the
Credit Agreement and (y) all other Current Indebtedness."
Section 3. Miscellaneous.
Section 3.1. Applicability of the Original Indenture. The provisions
of the Original Indenture, as supplemented and amended by this Supplement, are
hereby ratified, approved and confirmed and remain in full force and effect.
This Supplement shall be construed as having been authorized, executed and
delivered under the provisions of (S) 8.2 of the Indenture.
Section 3.2. Counterparts. This Supplement may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 3.3. No Legend Required. Any and all notices, requests,
certificates and any other instruments, including the Notes may refer to the
Indenture or the Trust Indenture dated as of March 31, 1990, without making
specific reference to this Supplement, but nevertheless all such references
shall be deemed to include this Supplement unless the context shall otherwise
require.
Section 3.4. No Responsibility of Trustees for Recitals. The
recitals and statements contained in this Supplement shall be taken as the
recitals and statements of the Obligors, and the Trustees assume no
responsibility for the correctness of the same.
<PAGE>
10
Section 3.5. Consent of Lenders to Supplement. The Company
represents and covenants that it has obtained the written consent of the
Requisite Lenders (as defined in the Credit Agreement) to its execution of this
Supplement.
Section 3.6. Furnishing of Documents. The Company will within 10
business days after the date of the closing of the Second Amendment dated as of
September 15, 1995 (the "Bank Amendment") to the Credit Agreement (as defined in
the Indenture), furnish to each holder of the Notes, the Trustee and Chapman and
Cutler (a) fully executed counterparts of this Supplement and (b) the Bank
Amendment.
Section 3.7. Payment of Special Counsel Fees. The Company will pay
within 30 days after receipt of a statement therefor, the reasonable fees and
disbursements of Chapman and Cutler as special counsel to the Noteholders in
connection with the execution and delivery of this Supplement.
Section 3.8. Payment of Administrative Fee. The Company has paid to
the Trustee for the ratable benefit of the Holders of the Senior Notes an
administrative fee in the aggregate amount of $60,000.
* * *
<PAGE>
IN WITNESS WHEREOF, each Obligor has caused this Supplement to be
executed on its behalf by its President or Vice President and Vice President or
Secretary or Assistant Secretary; and NationsBank of Georgia, National
Association has caused this Supplement to be executed on its behalf by one of
its Corporate Trust Officers and attested by one of its Assistant Secretaries
and Elizabeth Talley has hereunto set her hand, all as of the date first above
written.
RAMSAY HEALTH CARE, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
_________________________
Name: Daniel A. Sims
Title: Assistant Secretary
BOUNTIFUL PSYCHIATRIC
HOSPITAL, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
_________________________
Name: Daniel A. Sims
Title: Assistant Secretary
CUMBERLAND MENTAL HEALTH, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
_________________________
Name: Daniel A. Sims
Title: Assistant Secretary
<PAGE>
EAST CAROLINA PSYCHIATRIC
SERVICES CORPORATION
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
_________________________
Name: Daniel A. Sims
Title: Assistant Secretary
HAVENWYCK HOSPITAL, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
_________________________
Name: Daniel A. Sims
Title: Assistant Secretary
MESA PSYCHIATRIC HOSPITAL, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
_________________________
Name: Daniel A. Sims
Title: Assistant Secretary
PSYCHIATRIC INSTITUTE OF
WEST VIRGINIA, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
ATTEST:
/S/ Daniel A. Sims
______________________
Name: Daniel A. Sims
Title: Assistant Secretary
<PAGE>
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
As Corporate Trustee
(SEAL) By /S/ Elizabeth T. Talley
____________________________
Name: Elizabeth T. Talley
Title: Asst. Vice President
ATTEST:
/S/ Sabrina Fuller
_________________________
Name: Sabrina Fuller
Title: Trust Officer
/S/ Elizabeth T. Talley
______________________________
Elizabeth T. Talley,
As Individual Trustee
<PAGE>
EXHIBIT 10.101
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
---------------------------------------------
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT dated as of October 12, 1995
by and among Paul Ramsay Holdings Pty. Limited, an Australian corporation (the
"Acquiror"), Ramsay Health Care, Inc., a Delaware corporation (the "Seller"),
and, solely for the purposes of Sections I, III and VI hereof, Ramsay Health
Care Pty. Limited, an Australian corporation (the "Manager").
W I T N E S S E T H:
-------------------
WHEREAS, the Acquiror and the Seller are parties to that certain Stock
Purchase Agreement dated as of September 7, 1995 (the "Original Agreement")
pursuant to which the Acquiror is to purchase 266,667 shares of common stock,
$.01 par value ("Common Stock"), of the Seller (the "Original Shares"), and the
Seller is to issue and sell to the Acquiror, for the consideration therein
provided, the Original Shares;
WHEREAS, the Seller is unable to comply with the conditions to the
Acquiror's obligation to close set forth in Section V(D) of the Original
Agreement;
WHEREAS, the Manager is an affiliate of the Acquiror and a party to that
certain Amended and Restated Management Agreement dated as of June 25, 1992 with
the Seller (the "Management Agreement") pursuant to which the Seller, among
other matters, is obligated to pay certain management fees and other amounts to
the Manager;
WHEREAS, the Seller proposes to enter into an agreement with certain of its
lenders which would restrict the payment in cash of the amounts now and
hereafter due pursuant to the Management Agreement;
WHEREAS, the Seller, the Acquiror and the Manager desire to provide for the
issuance of 154,500 shares of Common Stock (the "Management Fee Shares") for a
purchase price of $560,062.50 payable $1,545.00 in cash and as a prepayment by
the Seller of $558,517.50 in Management Fees;
WHEREAS, the Acquiror desires to purchase an additional 121,363 shares of
Common Stock (the "Cash Shares", and together with the Management Fee Shares,
the "Shares") for $439,940.88 in cash; and
<PAGE>
2
WHEREAS, the Acquiror and the Seller have determined that it is desirable
to amend and restate the Original Agreement to delete Section V(D) of the
Original Agreement to provide for the purchase and sale of the Shares in lieu of
the Original Shares as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto hereby agree as
follows:
SECTION I
PURCHASE AND SALE OF THE SHARES
-------------------------------
A. Purchase and Sale of the Shares. Subject to the terms and conditions
of this Agreement and on the basis of the representations, warranties, covenants
and agreements herein contained, (i) the Seller hereby agrees to sell, issue and
convey to the Acquiror on the Closing Date (as hereinafter defined), and the
Acquiror hereby agrees to purchase, acquire and accept from the Seller on the
Closing Date, the Cash Shares, and (ii) the Manager hereby directs the Seller
to, the Seller does hereby, issue and convey to the Acquiror on the date hereof,
and the Acquiror hereby acquires and accepts from the Seller on the date hereof,
the Management Fee Shares.
B. Consideration for the Shares. The consideration for the issuance of
the Shares shall be paid as follows:
(i) The Management Fee Shares are being issued for a purchase price of
$560,062.50 payable $1,545.00 in cash and as a prepayment by the Seller of
$558,517.50 of amounts now and hereafter due during the Seller's current fiscal
year pursuant to the Management Agreement, representing a purchase price of
$3.625 per share of Common Stock. The Manager hereby accepts the issuance by
the Seller to the Acquiror of the Management Fee Shares as a prepayment of
$558,517.50 of the amounts now or hereafter due during the Seller's current
fiscal year pursuant to the Management Agreement. The Seller hereby
acknowledges receipt of $1,545.00 in cash from the Manager in payment of the
cash portion of the purchase price for the Management Fee Shares.
(ii) The Acquiror hereby agrees, subject to and in accordance with the
terms and conditions hereof, to pay to the Seller on the Closing Date, upon
receipt of the certificate for the Cash Shares referred to in paragraph C
<PAGE>
3
of this Section I, the sum of $439,940.88, representing a purchase price of
$3.625 per share of Common Stock, payable in cash by certified or official bank
check payable to the order of the Seller or direct bank wire transfer of
immediately available funds to a bank account or accounts to be designated by
the Seller.
C. Delivery of the Shares. The Acquiror hereby acknowledges receipt
of a certificate of the Seller representing the Management Fee Shares. Delivery
of the Cash Shares shall be made by the Seller to the Acquiror on the Closing
Date by delivering a certificate of the Seller representing the Cash Shares
registered in the name of the Acquiror, such certificate to be accompanied by
any requisite documentary or stock transfer taxes.
D. The Closing. The closing of the sale of the Cash Shares to the
Acquiror shall occur on October 30, 1995 (the "Closing Date"), or on such other
date as shall be mutually agreed to between the Seller and the Acquiror.
SECTION II
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
------------------------------
The Seller hereby represents and warrants to the Acquiror and the
Manager, as of the date hereof and as of the Closing Date, that:
A. Organization; Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power and authority to own
its properties and to conduct the businesses in which it is now engaged.
B. Authority. The Seller has full corporate power and authority to
execute and deliver this Agreement and to perform all of its obligations
hereunder, and no consent or approval of any other person or governmental
authority is required therefor. The execution and delivery of this Agreement by
the Seller, the performance by the Seller of its covenants and agreements
hereunder and the consummation by the Seller of the transactions contemplated
hereby have been duly authorized by all necessary corporate action. This
Agreement constitutes a valid and legally binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or
<PAGE>
4
other similar laws of general application relating to or affecting the
enforcement of creditors' rights or by general principles of equity.
C. No Legal Bar; Conflicts. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
violates any provision of the Certificate of Incorporation or By-Laws of the
Seller or any law, statute, ordinance, regulation, order, judgment or decree of
any court or governmental agency, or conflicts with or results in any breach of
any of the terms of or constitutes a default under or results in the termination
of or the creation of any lien pursuant to the terms of any contract or
agreement to which the Seller is a party or by which the Seller or any of its
assets is bound.
D. Authorization of Shares. The Shares being purchased by the
Acquiror hereunder have been duly and validly authorized and, upon delivery of
the certificate representing ownership by the Acquiror of the Shares as herein
provided, for the consideration herein provided, such Shares will be duly and
validly issued, fully paid and nonassessable.
SECTION III
REPRESENTATIONS AND WARRANTIES
OF THE ACQUIROR AND THE MANAGER
-------------------------------
Each of the Acquiror and the Manager, jointly and severally, hereby
represents and warrants to the Seller, as of the date hereof and as of the
Closing Date, that:
A. Authority. It has full corporate power and authority to execute
and deliver this Agreement and to perform all of its obligations hereunder, and
no consent or approval of any other person or governmental authority is required
therefor. The execution and delivery of this Agreement by it, the performance
by it of its covenants and agreements hereunder and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and legally binding
obligation of it, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or other similar
laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.
<PAGE>
5
B. No Legal Bar; Conflicts. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
violates any law, statute, ordinance, regulation, order, judgment or decree of
any court or governmental agency, or conflicts with or results in any breach of
any of the terms of or constitutes a default under or results in the termination
of or the creation of any lien pursuant to the terms of any contract or
agreement to which it is a party or by which it or any of its assets is bound.
C. Investment in the Seller.
(i) It understands that the Seller proposes to issue and deliver to
the Acquiror the Shares pursuant to this Agreement without compliance with the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"); that for such purpose the Seller will rely upon its
representations and warranties contained herein; and that such non-compliance
with registration is not permissible unless such representations and warranties
are correct.
(ii) It understands that, under existing rules of the Securities and
Exchange Commission (the "SEC"), the Acquiror may be unable to sell the Shares
except to the extent that the Shares may be sold (i) pursuant to an effective
registration statement covering such sale pursuant to the Securities Act and
applicable state securities laws or an applicable exemption therefrom or (ii) in
a bona fide private placement to a purchaser who shall be subject to the same
restrictions on any resale or (iii) subject to the restrictions contained in
Rule 144 under the Securities Act ("Rule 144").
(iii) It is not relying on the Seller respecting the financial, tax
and other economic considerations of an investment in the Common Stock, and it
has relied on the advice of, or has consulted with, only its own advisors.
(iv) It is familiar with the provisions of Rule 144 and the
limitations upon the availability and applicability of such rule.
(v) It is a sophisticated investor familiar with the type of risks
inherent in the acquisition of restricted securities such as the Shares and its
financial position is such that it can afford to retain the Shares for an
indefinite period of time without realizing any direct or indirect cash return
on its investment.
<PAGE>
6
(vi) It has such knowledge and experience in financial, tax and
business matters so as to enable it to utilize the information made available to
it in connection with the issuance of the Shares to the Acquiror and to evaluate
the merits and risks of an investment in the Shares and to make an informed
investment decision with respect thereto.
(vii) The Acquiror is purchasing the Shares as an investment for its
sole account, and without any present view towards the resale or other
distribution thereof.
D. Legend. Each certificate representing Shares shall contain upon
its face or upon the reverse side thereof a legend to the following effect:
"These securities have not been registered under the Securities Act of
1933, as amended, or qualified under state securities laws and may not be
sold, pledged, or otherwise transferred unless (a) covered by an effective
registration statement under the Securities Act of 1933, as amended, and
qualified under applicable state securities laws, or (b) the Corporation
has been furnished with an opinion of counsel acceptable to the Corporation
to the effect that no registration or qualification is legally required for
such transfer."
SECTION IV
CONDITIONS TO THE SELLER'S OBLIGATION TO CLOSE
----------------------------------------------
The obligation of the Seller to sell the Cash Shares and otherwise to
consummate the transactions contemplated by this Agreement on the Closing Date
is subject to the following conditions precedent, any or all of which may be
waived by the Seller in the Seller's sole discretion, and each of which the
Acquiror hereby agrees to use its reasonable best efforts to satisfy at or prior
to the Closing:
A. Representations, Warranties and Covenants. The representations
and warranties of the Acquiror contained herein shall be true and correct at and
as of the Closing Date with the same effect as though all such representations
and warranties were made at and as of the Closing Date and the Acquiror shall
have complied with all of its covenants and agreements contained herein required
to be complied with on or prior to the Closing Date.
<PAGE>
7
B. No Litigation. No action, suit, proceeding, writ, judgment,
injunction, decree or similar order of any governmental entity, authority or
agency or of any other third party restraining, enjoining or otherwise
preventing the consummation of any of the transactions contemplated by this
Agreement, or seeking to obtain any damages or any other relief as a result of
this Agreement or any of the transactions contemplated hereby, shall be pending
or threatened.
C. Approvals. All governmental, corporate and other third party
filings, consents, authorizations and approvals (if any) that are required for
the consummation of the transactions contemplated hereby shall have been duly
made and obtained in form and substance reasonably satisfactory to the Seller.
SECTION V
CONDITIONS TO THE ACQUIROR'S OBLIGATION TO CLOSE
------------------------------------------------
The obligation of the Acquiror to purchase the Cash Shares and
otherwise to consummate the transactions contemplated by this Agreement on the
Closing Date is subject to the following conditions precedent, any or all of
which may be waived by the Acquiror in its sole discretion, and each of which
the Seller hereby agrees to use its reasonable best efforts to satisfy at or
prior to the Closing:
A. Representations, Warranties and Covenants. The representations
and warranties of the Seller contained herein shall be true and correct at and
as of the Closing Date with the same effect as though all such representations
and warranties were made at and as of the Closing Date and the Seller shall have
complied with all of its covenants and agreements contained herein required to
be complied with on or prior to the Closing Date.
B. No Litigation. No action, suit, proceeding, writ, judgment,
injunction, decree or similar order of any governmental entity, authority or
agency or of any other third party restraining, enjoining or otherwise
preventing the consummation of any of the transactions contemplated by this
Agreement, or seeking to obtain any damages or any other relief as a result of
this Agreement or any of the transactions contemplated hereby, shall be pending
or threatened.
<PAGE>
8
C. Approvals. All governmental, corporate and other third party
filings, consents, authorizations and approvals (if any) that are required for
the consummation of the transactions contemplated hereby will have been duly
made and obtained in form and substance reasonably satisfactory to the Acquiror.
SECTION VI
MISCELLANEOUS
-------------
A. Notices. All notices, requests or instructions hereunder shall
be in writing and delivered personally, by telecopy or sent by registered or
certified mail, postage prepaid, as follows:
(1) if to the Acquiror or the Manager:
154 Pacific Highway
Greenwich NSW 2065
Australia
Telecopy: (011) 61-2-906-5205
(2) if to the Seller:
One Poydras Plaza
639 Loyola Avenue
Suite 1700
New Orleans, Louisiana 70113
Attention: President
Telecopy No.: (504) 585-0500
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered or delivered by telecopy, and five days after the date of
mailing, if mailed.
B. Survival of Representations. Each representation, warranty,
covenant and agreement of the parties hereto herein contained shall survive the
execution of this Agreement, notwithstanding any investigation at any time made
by or on behalf of any party hereto.
C. Entire Agreement. This Agreement and the documents referred to
herein contain the entire agreement between the parties hereto with respect to
the transactions contemplated hereby, and amends and restates the Original
<PAGE>
9
Agreement in its entirety. No modification hereof shall be effective unless in
writing and signed by the party against which it is sought to be enforced.
D. Assignment. This Agreement shall not be assignable by the Seller
or the Acquiror except pursuant to a writing executed by each of the parties
hereto; provided that the Acquiror may assign any of its rights hereunder to any
affiliate of the Acquiror which agrees to be bound by all of the obligations of
the Acquiror hereunder or to any lender in connection with any financing
transaction entered into by the Acquiror or any of its affiliates and that the
Manager hereby assigns its rights to acquire the Management Fee Shares to the
Acquiror.
E. Invalidity, Etc. If any provision of this Agreement, or the
application of any such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected thereby.
F. Expenses. Except as expressly set forth herein, each of the
parties hereto shall bear such party's own expenses in connection with this
Agreement and the transactions contemplated hereby.
G. Headings. The headings of this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
H. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
I. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable in the case of
agreements made and to be performed entirely within such State.
J. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
K. Third Party Beneficiary. This Agreement shall not create any
rights in favor of any person not a party hereto.
* * *
<PAGE>
10
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
PAUL RAMSAY HOLDINGS PTY. LIMITED
By /S/ Peter Evans
_________________________________
Name: Peter Evans
Title: Director
RAMSAY HEALTH CARE, INC.
By /S/ Reynold J. Jennings
_________________________________
Name: Reynold J. Jennings
Title: President
Solely for the purposes of
Sections I, III and VI:
RAMSAY HEALTH CARE PTY. LIMITED
By /S/ Peter Evans
_________________________________
Name: Peter Evans
Title: Director
<PAGE>
EXHIBIT 10.102
AMENDMENT dated as of October 3, 1995 (this "Amendment") made by Ramsay
Health Care, Inc., a Delaware corporation (the "Company"), to that certain
Rights Agreement dated as of August 1, 1995 (the "Agreement") between the
Company and First Union National Bank of North Carolina (the "Rights Agent").
WHEREAS, the Company has determined (i) that the definition of "Beneficial
Owner" in the Agreement should be amended as provided herein, (ii) that the
definition of "Acquiring Person" in the Agreement should be amended to set forth
explicitly the status of shareholders who may inadvertently acquire 20% or more
of the Common Shares (as defined in the Agreement) and who are prepared to act
to correct such inadvertence, and (iii) the Agreement should be amended to
provide protection explicitly from coercive proxy and consent solicitations used
to circumvent the Agreement through a redemption of the Rights (as defined in
the Agreement) after a change in the Board of Directors;
WHEREAS, the Company desires to provide certainty to its shareholders, the
securities markets and the Rights Agent in respect of the terms of the Agreement
and to further the purposes and intent of the Agreement; and
WHEREAS, in order to effect the foregoing, the Company has determined to
amend the Agreement pursuant to Section 27 of the Agreement as set forth below.
NOW, THEREFORE, effective as of the date hereof, the Agreement is hereby
amended pursuant to Section 27 thereof as follows:
1. Section 1(a) of the Agreement is hereby deleted and replaced with
the following:
"(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but
shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any Person holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding
the foregoing, (i) no Person shall become an "Acquiring Person" solely
as the result of (x) an acquisition after the date hereof of Common
Shares by the Company which, by
<PAGE>
2
reducing the number of Common Shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to
20% or more of the Common Shares of the Company then outstanding or
(y) the acquisition of Beneficial Ownership of 20% or more of the
Common Shares of the Company then outstanding in the good faith belief
that such acquisition would not (A) cause such Beneficial Ownership to
exceed 20% of the Common Shares then outstanding and such Person
relied in good faith in computing the percentage of its Beneficial
Ownership on publicly filed reports or documents of the Company which
are inaccurate or out-of-date or (B) otherwise cause a Distribution
Date to occur; (ii) subject to the proviso in this clause (ii), no
Person (an "Acquiror") shall become an "Acquiring Person" as a result
of the acquisition after the date hereof by an Acquiror from Paul J.
Ramsay or from any Person who is an Affiliate or Associate of Paul J.
Ramsay at the time of such acquisition (collectively, the "Ramsay
Persons") of (1) any of the shares of Class B Preferred Stock
currently held by any Ramsay Person, (2) any Common Shares issued
pursuant to options or other rights to purchase Common Shares
currently held by any Ramsay Person, (3) any Common Shares issued
pursuant to the Class B Preferred Stock currently held by any Ramsay
Person or (4) any Common Shares currently held by any Ramsay Person;
provided that, at the time of such acquisition, the Acquiror (together
with all of such Person's Affiliates and Associates) are not the
Beneficial Owners of more than 1% or more of the Common Shares of the
Company then outstanding and provided further that, following such
acquisition, the Acquiror (together with all of such Person's
Affiliates and Associates) do not become the Beneficial Owners of an
additional 1% or more of the Common Shares of the Company then
outstanding, and (iii) subject to the proviso in this clause (iii),
none of the Ramsay Persons shall become an "Acquiring Person" in the
event that any Ramsay Person (together with all other Ramsay Persons)
become the Beneficial Owners after the date hereof of additional
Common Shares; provided that the number of Common Shares of the
Company of which all Ramsay Persons are the Beneficial Owners does not
exceed one Common Share less than 50% of the Common Shares of the
Company then outstanding. Notwithstanding clause (i) of the prior
sentence, if any Person that is not an Acquiring Person due to such
clause (i) does not reduce its percentage
<PAGE>
3
of Beneficial Ownership of Common Shares to below 20% by 5:00 P.M. New
York City time on the tenth Business Day after notice (including
telephonic or facsimile) from the Company (the date of notice being
the first day) that such Person's Beneficial Ownership of Common
Shares so exceeds 20%, such Person shall, at the end of such ten
Business Day period, become an Acquiring Person (and such clause (i)
shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors of the
Company, acting by a vote of those directors of the Company whose
approval would be required to redeem the Rights under Section 23."
2. Section 1(c)(i) of the Agreement is hereby deleted and replaced
with the following:
"(i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 under the Exchange Act, as in effect on the date of this
Agreement;"
3. Section 23(a) of the Agreement is hereby deleted and replaced with
the following:
"(a) The Board of Directors of the Company may, at its option,
at any time prior to such time as a Person becomes an Acquiring
Person, order the redemption of all, but not fewer than all, the then
outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price, and the
date of such redemption being the "Redemption Date"), and the Company,
at its option, may pay the Redemption Price either in cash or Common
Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to
be at least equivalent in value to the Redemption Price; provided,
however, that, in addition to any other limitations contained herein
on the right to redeem outstanding Rights (including, without
limitation, the occurrence of any event or the expiration of any
period after which the Rights may no longer be redeemed), for the 120-
day period after any date of a change (resulting from a proxy or
consent
<PAGE>
4
solicitation) in a majority of the Board of Directors of the Company
in office at the commencement of such solicitation, the Rights may
only be redeemed if (A) there are directors then in office who were in
office at the commencement of such solicitation and (B) the Board of
Directors of the Company, with the concurrence of a majority of such
directors then in office, determines that such redemption is, in their
judgment, in the best interests of the Company and its stockholders."
4. This Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State, without regard to any
conflict of laws principles which would apply the laws of any other
jurisdiction.
5. Effective as of the date hereof, this Amendment supersedes that
certain Interpretive Supplement dated as of September 1, 1995 made by the
Company to the Agreement, and from and after the date hereof such
Interpretive Supplement shall no longer be applicable. The Agreement, as
amended hereby, is hereby ratified, confirmed and continued in full force
and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed as of the date first above written.
RAMSAY HEALTH CARE, INC.
By /S/ Reynold J. Jennings
____________________________
Name: Reynold J. Jennings
Title: President
<PAGE>
5
First Union National Bank of North Carolina hereby acknowledges
receipt of this Amendment made pursuant to Section 27 of the Agreement.
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By /S/ Melissa H. Sullivan
____________________________
Name: Melissa H. Sullivan
Title: Account Executive
<PAGE>
EXHIBIT 11
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------
SEPTEMBER 30
---------------------------
1995 1994
---------- ----------
<S> <C> <C>
PRIMARY
Weighted average common shares outstanding................... 7,721,142 7,717,869
Class A convertible preferred stock.......................... --- 22,910
Class B convertible preferred stock, Series C................ ---* 1,424,860
Net effect of dilutive stock options and warrants--based on
the treasury stock method using average market price........ ---* 315,409
---------- ----------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES................................... 7,721,142 9,481,048
========== ==========
Net Income (Loss) Available to Common Shareholders......... $ (482,000)** $ 588,000
========== ==========
NET INCOME (LOSS) PER SHARE................................ $(0.06) $0.06
========== ==========
FULLY DILUTED
Weighted average common shares outstanding................... 7,735,328 7,720,043
Class A convertible preferred stock.......................... --- 22,910
Class B convertible preferred stock, Series C................ ---* 1,424,860
Net effect of dilutive stock options and warrants--based on
the treasury stock method using the year-end market
price, if higher than average market price.................. ---* 379,569
---------- ----------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES................................... 7,735,328 9,547,382
========== ==========
Net Income (Loss) Available to Common Shareholders......... $ (482,000)** $ 588,000
========== ==========
NET INCOME (LOSS) PER SHARE................................ $(0.06) $0.06
====== =====
</TABLE>
* Common stock equivalents not considered given loss reported for the period.
** Net loss reported for the period increased by dividends related to the
Class B convertible preferred stock, Series C, totalling $91,000.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,045,000
<SECURITIES> 0
<RECEIVABLES> 27,174,000
<ALLOWANCES> 3,469,000
<INVENTORY> 0
<CURRENT-ASSETS> 40,867,000
<PP&E> 102,969,000
<DEPRECIATION> 30,288,000
<TOTAL-ASSETS> 136,129,000
<CURRENT-LIABILITIES> 20,265,000
<BONDS> 52,178,000
<COMMON> 83,000
0
233,000
<OTHER-SE> 61,071,000
<TOTAL-LIABILITY-AND-EQUITY> 136,129,000
<SALES> 0
<TOTAL-REVENUES> 29,129,000
<CGS> 0
<TOTAL-COSTS> 25,795,000
<OTHER-EXPENSES> 1,283,000
<LOSS-PROVISION> 956,000
<INTEREST-EXPENSE> 1,726,000
<INCOME-PRETAX> (631,000)
<INCOME-TAX> (240,000)
<INCOME-CONTINUING> (391,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (391,000)
<EPS-PRIMARY> $(0.06)
<EPS-DILUTED> $(0.06)
</TABLE>
